Collins v. Yellen

Supreme Court of the United States · 2021 · Administrative Law

Reporter Citation Pending

Updated August 1, 2026

Administrative LawFHFA removalseparation of powersconservatorshipanti-injunction clauseFHFAfor-cause removalsingle-director agency

Facts

Congress created the FHFA in the Housing and Economic Recovery Act of 2008 as an independent agency led by a single Director removable by the President only for cause. After placing Fannie Mae and Freddie Mac into conservatorship, the FHFA negotiated agreements with Treasury under which Treasury provided capital in exchange for senior preferred shares and fixed-rate dividends. In 2012, the FHFA and Treasury adopted a third amendment replacing the fixed-rate dividend with a variable formula requiring the companies to pay Treasury nearly all of their net worth above a small capital reserve. Shareholders alleged that the FHFA exceeded its conservator authority by adopting that amendment and that the agency's single-director, for-cause removal structure violated separation of powers.

Issue

Whether the shareholders' statutory challenge to the third amendment is barred because the FHFA acted within its powers as conservator under the Recovery Act, and whether the Recovery Act's restriction on the President's ability to remove the FHFA Director only for cause is unconstitutional. If the removal restriction is unconstitutional, the Court also had to decide whether the third amendment must be set aside or whether some other remedy, if any, is appropriate.

Rule

Under 12 U.S.C. §4617(f), courts may not take action to restrain or affect the FHFA's exercise of powers or functions as conservator or receiver, but that bar does not apply if the FHFA exceeded those powers. The Recovery Act gives the FHFA broad conservator authority, including authority to act in what it determines is in the best interests of the regulated entity or the Agency. Under Seila Law, Congress may not insulate the head of a single-director agency from at-will presidential removal; however, an unconstitutional removal restriction does not itself make actions taken by properly appointed officers void, and retrospective relief requires a showing that the restriction caused harm.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Atlanta, the Federal Housing Stability Agency places Harbor National Mortgage into conservatorship. Acting as conservator, the agency revises a financing agreement so Harbor must transfer nearly all quarterly profits to a federal backstop fund, but the revision also ensures Harbor will never need to borrow from that same fund merely to make periodic payments during bad quarters. Common shareholders sue to enjoin the revision as contrary to Harbor’s interests.

How should a court most likely rule on the request for injunctive relief?

Explanation. The anti-injunction clause bars courts from restraining or affecting the agency’s exercise of powers as conservator unless the agency exceeded those powers. The majority held that the conservator has expansive authority and may act in what it determines is in the best interests of the regulated entity or the agency. A measure designed to preserve a federal capital backstop and promote market stability falls within that authority even if it disadvantages shareholders. The court does not ask whether the agency made the best business choice, only whether it stayed within its statutory powers. (Derived from Collins v. Yellen (n.d.).)