A federal appeals court in Texas has ruled that the single-director structure of the Federal Housing Finance Agency is unconstitutional but validated a dividend agreement requiring the government-sponsored enterprises to deliver nearly all of their profit to the Treasury Department, National Mortgage News reported. The U.S. Court of Appeals for the Fifth Circuit in Texas reversed the previous court’s decision and agreed with the shareholders that the FHFA was “unconstitutionally insulated from executive control” since its single director — as opposed to a board or commission — cannot be fired by a sitting president without cause. If upheld, the decision could render the agency’s actions void. The court panel consisted of Chief Judge Carl Stewart and Judges Catharina Haynes and Don Willett. Haynes agreed with the court’s decision, while Stewart dissented on the constitutionality issue. Willett also dissented on the profit sweep issue.
