Trump’s first Supreme Court appointee’s radical vision to remake America, explained.
Neil Gorsuch was ready to blow up the US housing market over a minor legal violation.
The case in front of the Supreme Court was Collins v. Yellen (2021), which had at its center the Federal Housing Finance Agency (FHFA), an obscure body that oversaw hundreds of billions of dollars’ worth of transactions intended to stabilize the housing market after the 2008 recession. The FHFA is led by a single director whom only the president can fire “for cause.” The plaintiffs in Collins v. Yellen argued the president must have unlimited power to fire the agency’s head, citing the Supreme Court’s 2020 ruling in Seila Law LLC v. Consumer Financial Protection Bureau (CFPB).
But under the Collins plaintiffs’ arguments, it also followed that if the FHFA head was fired, every action the agency had taken since its creation in 2008 should be declared void — a truly radical prospect. That argument won very little favor from the justices. Last June, the Court handed down a relatively modest opinion that gave President Joe Biden (and all future presidents) the power to fire the FHFA director without reversing the agency’s past work.
But Gorsuch would have none of it.
In a partial dissent, Gorsuch complained that his colleagues were too spooked by the prospect of “unwinding or disgorging hundreds of millions of dollars that have already changed hands” (an underestimate of the amount of money at stake by several orders of magnitude). The proper approach, Gorsuch opined in Collins, was to declare the FHFA’s actions “void.”
If Gorsuch had gotten his way, 13 years of work and hundreds of billions of dollars’ worth of transactions would have been unraveled, possibly delivering a shock to the mortgage-lending industry similar to that of the 2008 crisis — or even sending the world economy into a tailspin.
And yet, for Gorsuch, the potential consequences were irrelevant to how the Court should rule.
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