Fannie Mae-No Politics (FNMA)

[obiterdictum]

A little bit off subject but, I’ve read where this ruling puts Jay Powell in same position as Calabria, and therefore subject to firing by president at will. Have you heard that? Is there any substance to that?

Have not read or heard that.

Substance?

When the entry of judgment “for cause” removal protection of the FHFA Director found in 12 U.S.C. § 4512(b)(2) is recorded as unconstitutional, that statutory provision is no longer valid and is no longer law, if left unchallenged. Thus, Calabria, ostensibly, can be subject to firing by the President at will in an interim period between a possible appeal and decision.

However, there is nothing final in this ruling. The ruling can be appealed and heard in the US Supreme Court where the ruling can be affirmed or reversed and a binding precedent made.

Case in point: The reversal of the constitutionality of a similar statutory provision in PHH Corp. et al. vs Consumer Financial Protection Board. Removal "for cause" was declared unconstitutional by United States Court of Appeals for the D.C. Circuit Panel and then reversed in the United States Court of Appeals for the D.C. Circuit en banc decision.

Sources:
https://www.theusconstitution.org/litigation/phh-corporation-et-al-v-consumer-financial-protection-bureau-d-c-cir/

PHH Corp. et al. vs Consumer Financial Protection Board
https://www.cadc.uscourts.gov/internet/opinions.nsf/B7623651686D60D585258226005405AC/$file/15-1177.pdf

12 U.S.C. § 4512(b)(2) - https://www.law.cornell.edu/uscode/text/12/4512

(b)Appointment; term

(1)Appointment
The Director shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who are citizens of the United States, have a demonstrated understanding of financial management or oversight, and have a demonstrated understanding of capital markets, including the mortgage securities markets and housing finance.

(2)Term
The Director shall be appointed for a term of 5 years, unless removed before the end of such term for cause by the President.