The US Supreme Court heard its final oral arguments of the year on Wednesday in the consolidated case of Collins v. Mnuchin. The issues being assessed in this case are whether the structure of the Federal Housing Finance Agency (FHFA) violates the separation of power doctrine, and whether “the courts must set aside a final agency action that FHFA took when it was unconstitutionally structured and strike down the statutory provisions that make FHFA independent.”

This case comes from a suit brought by shareholders in the company challenging the FHFA, which was created to oversee Fannie Mae and Freddie Mac following the 2008 housing crises. Acting on behalf of Fannie and Freddie, the FHFA brought an agreement in 2012 with the Treasury Department for the companies to pay dividends determined by the net worth of the companies. The shareholders are now arguing that the oversight has “nationalized” the companies in violation of the Constitution.

Under the separation of powers, the president retains the ability to remove the head of an executive agency. The shareholders are contending that the statutes underlying the oversight of the FHFA of these companies only allow the president to remove the FHFA head “for cause,” making the structure of the FHFA unconstitutional.

Another point that the parties argued was that, because this agreement was brought by an acting director, whether removing restrictions in similar statutes should automatically extend to acting officials rather than ones who have been confirmed by the senate.

The government argued that the shareholders’ claims should be rejected altogether because they are barred by the Recovery Act, which includes a clause that prohibits courts from restraining exercises of the conservator’s power.