President Donald Trump will soon be able to use his famous catch phrase against the head of a troubled federal agency, the Fair Housing Finance Agency, which is led by a single Obama appointee with no meaningful oversight from the president.
The 5th U.S. Circuit Court of Appeals ruled this week that the agency’s structure is unconstitutional.
In Collins v. Mnuchin, a three-judge panel of the 5th Circuit issued a per curiam opinion holding that Congress unconstitutionally “insulated the [Fair Housing Finance Agency] to the point where the executive branch cannot control the [agency] or hold it accountable.”
The judges sent the case back to the district court, ordering it to strike down a statutory limit (in 12 U.S.C. § 4512(b)(2)) on the president’s power to remove the agency’s director.
This is an important decision for our government’s separation of powers and for keeping the executive branch agencies accountable to the president.
An Unaccountable Agency
In the wake of the housing market collapse, Congress created the Fair Housing Finance Agency as part of the Housing and Economic Recovery Act of 2008, hoping it would rehabilitate two government-sponsored entities that had become insolvent: the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, more commonly known as Fannie Mae and Freddie Mac.
Congress designed the Fair Housing Finance Agency to be a politically independent entity empowered to create and enforce rules, while also overseeing operations at Fannie Mae and Freddie Mac and nursing them back to financial health.
But Congress also adopted some specific provisions that made the agency partisan and unaccountable to the president—unconstitutionally so, according to the 5th Circuit’s opinion.
Specifically, Congress authorized the president to appoint a single agency director for a five-year term who picks three deputy directors, and who would be removable by the president only “for cause.”
Read the full story from The Daily Signal
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