As the Supreme Court wrapped up its current term, it announced Thursday that it would hear a pair of cases related to litigation around the structure and payout dividend payout practices of Fannie Mae and Freddie Mac, Reuters reported.
Reuters reports:
The justices will review a 2019 ruling by the New Orleans-based 5th U.S. Circuit Court of Appeals that shareholders in the two companies could pursue a challenge to the 2012 agreement between the Federal Housing Finance Agency and the Treasury Department. The deal eliminated dividend payouts to various shareholders and required the companies to pay the U.S. Treasury an amount equal to their quarterly net worth each quarter.
The court also took up a related appeal brought by the shareholders that challenges the constitutional structure of the agency. … The cases will be heard together in the court’s next term, which starts in October.
In a similar case, the Supreme Court ruled in June that the structure of the Consumer Financial Protection Bureau is unconstitutional because it prevented the president from firing the director at will.
In 2008, the Federal Housing Finance Agency placed Fannie and Freddie under conservatorship “in response to a substantial deterioration in the housing markets that severely damaged each Enterprise’s financial condition and left both of them unable to fulfill their missions without government intervention.”
In 2012, a group of shareholders sued over the payout policies – calling them unconstitutional.