Fannie Mae-No Politics (FNMA)

[kthomp19]

Fifth circuit disagreed with Lamberth.

They disagreed that 4617(f) bars a court from issuing an injunction against the NWS. They did not disagree with Lamberth's assertion that FHFA owes no fiduciary duty to shareholders.

From page 33 of the en banc ruling (emphasis added):

The best-interests clause is also consistent with this reading. That clause, within the incidental-powers provision, authorizes FHFA to “take any action authorized by this section, which the Agency determines is in the best interests of the regulated entity or the Agency.” Permitting the conservator to act in its own interest may appear to depart from the traditional view of a conservator as fiduciary. But the best-interests clause modifies FHFA’s authority “as conservator or receiver,” and it only affects actions that are otherwise “authorized by this section.” So FHFA may pursue its own interests only within the conservator’s enumerated powers. It may not, for example, wind down a GSE and jettison receivership protections all in its own best interests. That would not be “authorized by this section.” Instead, this clause is a modest addition to traditional conservatorship powers. It may permit related-party transactions that would otherwise be inconsistent with fiduciary duties.

Actions taken by FHFA that are in the interest of the companies or the agency itself that promote safety and soundness, like a massive common share offering, are allowed by HERA.

Also, conservatorship in HERA, by the en banc panel's ruling, imposes duties on the conservator in regards to the companies. There is no such language regarding any duty to shareholders.