Collins v. Yellen

In Collins v. Yellen, shareholders of Fannie Mae and Freddie Mac challenged the Federal Housing Finance Agency's single-director structure, arguing that the agency's director could only be removed by the President for cause, which violated the separation of powers. The plaintiffs also sought to invalidate the net worth sweep agreement between FHFA and the U.S. Department of Treasury. The Supreme Court ruled that FHFA's leadership structure is unconstitutional under Article II, but the plaintiffs failed to prove that the unconstitutional removal provision caused their claimed financial harm. The Court therefore vacated the lower court ruling that had struck down the net worth sweep and remanded the case for further proceedings on whether a remedy was warranted.

The Supreme Court held that the FHFA's single-director structure is unconstitutional, but vacated and remanded the lower court ruling that had invalidated the net worth sweep, requiring plaintiffs to show actual harm linked to the removal restriction.

Whether the FHFA's single-director removal restriction violates the President's executive power under Article II, and whether plaintiffs are entitled to retrospective relief absent a showing of harm caused by the unconstitutional removal provision.

The decision reinforced the principle that independent agency leadership structures can violate separation of powers, following Seila Law v. CFPB. It limited retrospective relief for structural constitutional violations and had significant implications for housing finance regulation and ongoing shareholder litigation involving Fannie Mae and Freddie Mac.