President Biden will remove the head of the Federal Housing Finance Agency following a Supreme Court ruling that restrictions on firing the director were unconstitutional, White House officials said Wednesday.
White House press secretary Jen Psaki told reporters that the president would nominate a new head of the Federal Housing Finance Agency after the Supreme Court decision, but she did not give a timeline. The current head of the agency, Mark Calabria, was appointed by President Trump to a term set to expire in 2024.
Calabria was formerly the top economics adviser to Vice President Mike Pence. As a Capitol Hill staffer, he helped author the legislation that created the FHFA.
The Supreme Court on Wednesday ruled that the structure of the agency that oversees mortgage giants Fannie Mae and Freddie Mac violates separation of powers principles in the Constitution. The director of the FHFA is nominated by the president and confirmed by the Senate to a five-year term. Under the now stricken provision, the director was only removable by the president “for cause.”
Writing for the court, Justice Samuel Alito explained that “the Constitution prohibits even ‘modest restrictions’ on the President’s power to remove the head of an agency with a single top officer.”
In an ironic twist, the argument that will result in Calabria’s removal was brought before the court by shareholders of Fannie Mae and Freddie Mac. Calabria was as an ally of the shareholders’ attempts to free the mortgage companies from government control.
The case is in many ways similar to one the justices decided last year involving the FHFA’s companion agency, the Consumer Financial Protection Bureau, which is the government’s consumer watchdog agency. It was created by Congress in response to the same financial crisis.
In the case involving the bureau, the court struck down restrictions Congress imposed that said the president could only fire the bureau’s director for “inefficiency, neglect of duty, or malfeasance in office.”
Although the shareholders won their argument against the “for cause” removal provision, the Supreme Court held that this did not entitle them to the relief they sought—the voiding of a 2012 agreement that requires the FHFA to turn over all of the profits above an agreed upon capital cushion to the U.S. Treasury.
The two consolidated cases the court ruled in are Collins v. Yellen, No. 19-422, and Yellen v. Collins, No. 19-563.
—The Associated Press contributed to this report.
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