Full 5th Circ. Rules FHFA Is Unconstitutionally Structured

Law360 (September 9, 2019, 11:40 AM EDT) -- The full Fifth Circuit delivered a significant win to investors suing over the government's "net worth sweep" of Fannie Mae and Freddie Mac, reinstating part of their case and ruling the Federal Housing Finance Agency is unconstitutionally structured in a decision that may portend trouble ahead for the Consumer Financial Protection Bureau.

The en banc court said Friday that investors in the two government-sponsored enterprises, or GSEs, can proceed with previously dismissed claims alleging that the FHFA exceeded its authority with the sweep, which was instituted as part of a 2012 agreement between the agency and the U.S. Treasury Department and...

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