On June 23, the Supreme Court issued a decision in Collins v. Yellen, a case which concerned the Federal Housing Finance Agency (“FHFA”) and the two government sponsored enterprises (“GSEs”) which the FHFA regulates and currently holds in conservatorship—the Federal National Mortgage Association (“Fannie Mae” or “Fannie”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac” or “Freddie”).  The case presented a challenge by a group of Fannie and Freddie shareholders to a provision of the conservatorship which has effectively precluded the GSEs from paying dividends to shareholders.  Among other things, the plaintiffs targeted the constitutionality of the protection from removal enjoyed by the FHFA’s Director, which allowed the President to remove the Director only “for cause.”  This provision mirrored the removal protection provided to the Director of the Consumer Financial Protection Bureau (“CFPB”) and which the Court invalidated in Seila Law.

The Supreme Court declined to strike down the challenged provision of the conservatorship, but it did invalidate the FHFA Director’s “for cause” removal protection.  Not only does this decision have clear ramifications for the FHFA and GSEs, but it also may preview issues relating to the legal status of decisions rendered by CFPB Directors during the period in which they were unconstitutionally protected from removal from office.


Continue Reading Supreme Court Finds FHFA For-Cause Removal Structure Unconstitutional; Decision May Have Implications for CFPB

On April 22, the Supreme Court unanimously ruled in AMG Capital Management v. Federal Trade Commission that § 13(b) of the Federal Trade Commission (“FTC”) Act does not authorize the FTC to obtain equitable monetary relief, such as restitution for consumer harm.  This development will make it more complicated for the FTC to obtain consumer redress.  While the FTC will still be able to seek consumer redress through other legal avenues, especially § 19 of the FTC Act, these avenues generally impose additional legal requirements beyond what § 13(b) required.  This decision may prompt Congress to consider amending the FTC Act to increase the availability of consumer redress.  It may also encourage the CFPB to be more assertive in areas where the agencies share jurisdiction.

Continue Reading Supreme Court Ruling Complicates FTC’s Ability to Obtain Consumer Redress

On March 3, 2020, the U.S. Supreme Court heard oral arguments in Seila Law LLC v. Consumer Financial Protection Bureau, a case centered on the constitutionality of the Bureau’s leadership structure.  A transcript of the argument is available here, and an audio recording is available here.

Continue Reading U.S. Supreme Court Hears Arguments on Constitutionality of CFPB

On October 18, the Supreme Court granted certiorari in Seila Law v. Consumer Financial Protection Bureau (CFPB). The question presented before the Court is “whether the substantial executive authority yielded by the CFPB, an independent agency led by a single director, violates the separation of powers.”  In addition, the Court requested that the parties brief and argue an additional question: “If the Consumer Financial Protection Bureau is found unconstitutional on the basis of the separation of  powers, can 12 U.S.C. § 5491(c)(3) [the for-cause removal provision] be severed from the Dodd-Frank Act?”

Continue Reading Supreme Court Grants Certiorari in Seila Law v. Consumer Financial Protection Bureau

A recent United States Supreme Court case and new executive order will change the way federal agencies hire administrative law judges (“ALJs”), and together are expected to increase ALJs’ accountability to the heads of their agencies. On June 21, 2018, the United States Supreme Court held in Lucia v. Securities and Exchange Commission that the

For unprepared companies, whistleblowers can cause serious problems. Companies could be subject to burdensome investigations by law enforcement authorities or hit with substantial fines and other sanctions. Companies might even face exposure for alleged retaliation against a whistleblower if the situation is not handled carefully.

In this article for the New York Law Journal on