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WASHINGTON, June 23 (Reuters) – The United States Supreme Court on Wednesday made it easier for President Joe Biden to remove the head of the federal housing finance agency from office while dismissing separate claims filed by shareholders of housing companies. mortgage financing Fannie Mae and Freddie Mac.
The court upheld part of a lower court ruling that the structure of the Federal Housing Finance Agency is unconstitutional under the doctrine of separation of powers because the agency’s sole director no is not accountable enough to the president.
But the judges blamed the lower court for allowing shareholders to pursue a separate litigation challenging a 2012 agreement between the FHFA and the Treasury Department stemming from the government’s bailout of mortgage finance companies following the crisis. housing from 2008.
The court sent the case back to the lower courts to see if the shareholders can get redress on the basis of their constitutional claims.
The FHFA is run by a single administrator who, until Wednesday’s decision, could only be removed by the president “for cause”.
The Supreme Court ruling, in line with a similar ruling last year regarding the Consumer Financial Protection Bureau, will give Biden and future presidents the power to remove the head of the agency at any time. The current director of the FHFA is Mark Calabria, who was appointed to the post by former President Donald Trump, and the decision would make it easier for Biden to remove him if he chooses to do so.
The 2012 deal eliminated dividend payments to various shareholders and required Fannie and Freddie to pay the US Treasury an amount equal to their quarterly net worth, which now stands in the billions of dollars.
Reporting by Lawrence Hurley; Editing by Will Dunham