Wednesday, July 18, 2018

Government caretaker of Fannie and Freddie is unconstitutional, federal court rules

Freddie and Fanny are two massive crony entities. They were mistakes way back when, and mistakes now.
By the way I once interviewed a former CEO of Freddie Mac and I was very impressed by him. We were talking crony capitalism, on a stage in front of many business leaders, and he was frank about the challenges to Freddie/Fannie/Wall Street in the wake of the financial crisis. And more importantly the challenges Freddie and Fannie presented to the country and economy.
(From The Washington Examiner)
The government caretaker of Fannie Mae and Freddie Mac is unconstitutional, a federal court has ruled.
A three-judge panel for the U.S. Court of Appeals for the Fifth Circuit ruled that the Federal Housing Finance Agency, created in 2008 as the housing market collapsed, defies the Constitution because it does not answer to the president.
“We hold that Congress insulated the FHFA to the point where the Executive Branch cannot control the FHFA or hold it accountable,” the judges wrote in an unsigned opinion.
The particular issue is the fact that the FHFA is run by a single director who cannot be removed by the president except for cause. Unlike other federal agencies, the FHFA does not have a bipartisan commission and does not receive funding from Congress. Those features insulate it from executive oversight, in the court’s determination.
Click here for the article.


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