Government Sheds Lawsuit by Fannie Mae, Freddie Mac Shareholders

Shareholders of Fannie Mae and Freddie Mac failed to show they were injured by an unconstitutional provision in the Housing and Economic Recovery Act restricting the president’s ability to remove the director of the Federal Housing Finance Agency, a federal appeals court ruled.

The US Supreme Court ruled in 2021 that the for-cause restriction on the president’s removal authority in the HERA violates the separation of powers. The high court remanded the case for a determination of whether the shareholders could show they suffered an injury from the restriction.

The shareholders alleged that then-President Trump, when he took office, “was ...