Copyright: Andriy Blokhin
On June 23, the Supreme Court ended months of speculation — and years of disagreements between experts — with rulings on two significant issues regarding the constitutionality of the Federal Housing Finance Agency (FHFA). While the rulings dictate that FHFA will remain in charge of Fannie Mae and Freddie Mac (the Enterprises) and maintain the current shareholder agreements, the court also determined the FHFA leadership structure is unconstitutional—prompting President Biden to immediately remove the current FHFA Director Mark Calabria and announce the appointment of Sandra L. Thompson as the Acting Director.
In response to a 2012 agreement between FHFA and Treasury that allows the federal government to collect billions of dollars of profit from Fannie and Freddie, shareholders filed a lawsuit contesting this agreement and the constitutionality of FHFA’s conservatorship of the Enterprises. However, the court’s first ruling determined that changes to the preferred shareholder agreements made during the conservatorship were legal.
As had been indicated in an earlier decision on a similar case regarding the Consumer Financial Protection Bureau (CFPB) , the court’s second ruling found FHFA’s structure to be unconstitutional, in effect granting or clarifying the president’s right to fire and replace the director.
In the hours following the court ruling, the Administration went on record announcing they are "moving forward today to replace the current director [of the Federal Housing Finance Agency] with an appointee who reflects the administration's values." Shortly after this announcement, Director Mark Calabria released a statement resigning. That evening, the Administration announced Sandra L. Thompson would take the helm as Acting Director of FHFA.
Thompson has served as Deputy Director of the Division of Housing Mission and Goals (DHMG) since 2013. In this role, she was responsible for overseeing FHFA’s housing and regulatory policy, capital policy, financial analysis, fair lending and all mission activities for Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
The health and stability of Fannie and Freddie is critical to the future of the multifamily industry. As such, NMHC looks forward to working with the newly appointed Acting Director to ensure multifamily capital continues to be available in all markets at all times, so the apartment industry can address the broad range of America’s housing needs.
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