318

Authority of the Former Inspector General for the 

Federal Housing Finance Board to Act as Inspector 

General for the Federal Housing Finance Agency

The Federal Housing Finance Board Inspector General did not by statute automatically 

acquire authority to act as Inspector General for the Federal Housing Finance Agency

at the time of the enactment of the Federal Housing Finance Regulatory Reform Act of 

2008.

The former Federal Housing Finance Board Inspector General cannot appoint employees 

to the Office of Inspector General for the Federal Housing Finance Agency.

September 8, 2009

MEMORANDUM OPINION FOR THE GENERAL COUNSEL 

FEDERAL HOUSING FINANCE AGENCY

The Federal Housing Finance Regulatory Reform Act of 2008 (“Reform Act”), which Congress passed as division A of the Housing and 

Economic Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654, 

2659, abolished the Federal Housing Finance Board (“FHFB”), an independent agency that oversaw the Federal Home Loan Banks, see 12 

U.S.C. § 1422a (2006). The Reform Act established in place of the FHFB 

a new entity called the Federal Housing Finance Agency (“FHFA”). The 

FHFA now regulates and supervises “government sponsored enterprises” 

(“GSEs”) supporting mortgage markets, and this responsibility extends 

not only to the Federal Home Loan Banks, but also to the Federal National Mortgage Association (commonly known as “Fannie Mae”) and the 

Federal Home Loan Mortgage Corporation (commonly known as “Freddie 

Mac”). See Reform Act §§ 1002, 1101, 1102, 1311.

You have asked for our opinion on three questions about the Office of 

Inspector General of the FHFA: (1) whether by statute the former Inspector General for the FHFB at the time of the Reform Act’s enactment 

automatically can act as Inspector General for the FHFA pending the 

appointment of an Inspector General for the FHFA; (2) whether the former Inspector General for the FHFB has authority to appoint employees to 

the Office of Inspector General for the FHFA; and (3) whether employees 

of the Office of Inspector General for the FHFA are paid at FHFA pay 

rates or general federal employee pay rates.
Authority of Former IG for FHFB to Act as IG for FHFA

319

For the reasons given below, we conclude that: (1) the FHFB Inspector 

General at the time of the Reform Act’s enactment did not by statute 

automatically acquire authority to act as Inspector General for the FHFA; 

and, accordingly, (2) the former FHFB Inspector General cannot appoint 

employees to the Office of Inspector General for the FHFA. In light of 

these conclusions, we express no view as to what pay rates apply to employees of the FHFA Office of Inspector General.

I.

A.

Congress passed the Reform Act to ensure that the GSEs supporting 

mortgage markets—specifically, Fannie Mae, Freddie Mac, and the 

Federal Home Loan Banks—“operate in a safe and sound manner and 

fulfill the missions assigned under their charters.” H.R. Rep. No. 110-142, 

at 87 (2007). Fannie Mae and Freddie Mac are congressionally chartered 

entities that promote liquidity in residential mortgage markets by purchasing residential mortgages from lenders. See 12 U.S.C.A. §§ 1451, 1452, 

1454, 1455, 1717, 1718, 1719 (West 2001 & Supp. 2009); H.R. Rep. 

No. 110-142, at 95. These GSEs, though established by statute and given 

special privileges not available to private firms, may issue securities to 

investors. See 12 U.S.C.A. §§ 1453, 1454, 1455, 1716, 1717, 1718, 1719 

(West 2001 & Supp. 2009); H.R. Rep. No. 110-142, at 95. They generally 

finance mortgage purchases either by issuing debt securities or by packaging mortgages into so-called “mortgage-backed securities.” See H.R. Rep. 

No. 110-142, at 95. The Federal Home Loan Banks are regional entities 

cooperatively owned by member financial institutions. See 12 U.S.C.A. 

§§ 1423, 1424, 1426 (West 2001 & Supp. 2009); H.R. Rep. No. 110-142, 

at 95. Like Fannie Mae and Freddie Mac, they were established by statute 

to provide liquidity to residential mortgage lenders; they typically pursue 

this objective by providing collateralized financing to member institutions. See 12 U.S.C.A. §§ 1429, 1430, 1431 (West 2001 & Supp. 2009); 

H.R. Rep. No. 110-142, at 95.

Before the Reform Act, the Office of Federal Housing Enterprise Oversight (“OFHEO”), an office within the Department of Housing and Urban 

Development (“HUD”) headed by a presidentially-appointed and Senateconfirmed Director, oversaw the “safety and soundness” of Fannie Mae 
33 Op. O.L.C. 318 (2009)

320

and Freddie Mac, while the HUD Secretary supervised these GSEs in 

other respects, including compliance with certain affordable-housing 

mandates. See 12 U.S.C. §§ 4502(6), 4511, 4512, 4513, 4541, 4563 

(2006); H.R. Rep. No. 110-142, at 95. The FHFB, an independent agency 

within the executive branch, oversaw the Federal Home Loan Banks. 

See 12 U.S.C. §§ 1422, 1422a, 1422b (2006).

In the Reform Act, Congress abolished OFHEO and the FHFB and 

assigned regulatory and supervisory responsibility for Fannie Mae (and 

any Fannie Mae affiliates), Freddie Mac (and any Freddie Mac affiliates), 

and the Federal Home Loan Banks to a new independent agency, the 

FHFA. See Reform Act §§ 1101, 1301, 1311; 12 U.S.C.A. § 4511 (West 

Supp. 2009). The FHFA is headed by a “Director,” who receives advice 

“with respect to overall strategies and policies” from a “Federal Housing 

Finance Oversight Board” composed of the Director, the Secretary of 

the Treasury, the Secretary of HUD, and the Chairman of the Securities 

and Exchange Commission. Reform Act § 1101; 12 U.S.C.A. §§ 4512, 

4513, 4513a (West Supp. 2009). The FHFA Director has substantial 

regulatory powers over the covered GSEs, including the authority to place 

regulated GSEs in receivership or conservatorship in certain circumstances. See, e.g., Reform Act §§ 1108, 1113, 1128, 1144, 1145, 1205;

12 U.S.C.A. §§ 1430c, 4513b, 4518, 4561, 4616, 4617 (West Supp. 

2009). The Director also holds authority, subject to certain transition 

provisions discussed below regarding FHFB, OFHEO, and HUD employees, to “appoint and fix the compensation of such officers and employees 

of the Agency as the Director considers necessary to carry out the functions of the Director and the Agency.” 12 U.S.C.A. § 4515(a) (West Supp. 

2009). These officers and employees “may be paid without regard to the 

provisions of chapter 51 and subchapter III of chapter 53 of Title 5 relating to classification and General Schedule pay rates.” Id. Although the 

FHFA Director “shall be appointed by the President, by and with the 

advice and consent of the Senate,” the Reform Act provides that in the 

event of a vacancy in this position on the Act’s effective date, “the person 

serving as the Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development on that 

effective date shall act for all purposes as, and with the full powers of, 

the Director” until an initial Director is appointed. Reform Act § 1101; 

12 U.S.C.A. § 4512(b)(1), (5).
Authority of Former IG for FHFB to Act as IG for FHFA

321

B.

The Reform Act also provides for the appointment of an Inspector General for the FHFA. Specifically, the statute amends the Inspector General 

Act of 1978 (“IG Act”), 5 U.S.C.A. app. (West 2007 & Supp. 2009), to 

include the FHFA among the federal “establishments” in which “an office 

of Inspector General” “is established.” Reform Act § 1105(c); IG Act 

§§ 2, 12(2). The Reform Act also specifies that “[t]here shall be within 

the [FHFA] an Inspector General, who shall be appointed in accordance 

with section 3(a) of the Inspector General Act of 1978,” Reform Act 

§ 1105(a)(5), which provides that the Inspector General “shall be appointed by the President, by and with the advice and consent of the Senate,” 

IG Act § 3(a). Under the Inspector General Act, the Inspectors General 

for “establishments” like the FHFA have broad authority to conduct 

investigations with respect to programs and operations of the establishment. Id. §§ 4, 5. To carry out their functions, Inspectors General may

select, appoint, and employ such officers and employees as may be 

necessary for carrying out the functions, powers, and duties of the 

Office subject to the provisions of Title 5, United States Code, governing appointments in the competitive service, and the provisions of 

chapter 51 and subchapter III of chapter 53 of such title relating to 

classification and General Schedule pay rates.

Id. § 6(a)(7). Although each such Inspector General “shall report to and 

be under the general supervision of the head of the establishment” (here 

the FHFA Director) or, if this power is delegated, “the officer next in rank 

below such head,” id. § 3(a), only the President may remove the Inspector 

General, id. § 3(b), and “[n]either the head of the establishment nor the 

officer next in rank below such head shall prevent or prohibit the Inspector General from initiating, carrying out, or completing any audit or 

investigation, or from issuing any subpena during the course of any audit 

or investigation,” id. § 3(a).*

 

* The Inspector General Act also includes special provisions, not relevant here, governing the powers and duties of Inspectors General at particular agencies. See, e.g., IG 

Act §§ 8–8K.
33 Op. O.L.C. 318 (2009)

322

C.

Despite “abolish[ing]” OFHEO and the FHFB effective one year after 

the statute’s enactment, the Reform Act guarantees that each employee of 

these agencies “shall be transferred to the [FHFA] for employment” in “a 

position with the same status, tenure, grade, and pay as that held on the 

day immediately preceding the transfer.” Reform Act §§ 1301, 1303, 

1311, 1313. Permanent employees transferred under this provision “may 

not be involuntarily separated or reduced in grade or compensation during 

the 12-month period beginning on the date of transfer, except for cause.” 

Id. §§ 1303(b)(2), 1313(b)(2). Similarly, a temporary employee may be 

separated only “in accordance with the terms of the appointment of the 

employee.” Id.

The Reform Act likewise provides that certain HUD employees—those 

“whose position responsibilities primarily involve the establishment and 

enforcement of the housing goals under subpart B of part 2 of subtitle A 

of the Federal Housing Enterprises Financial Safety and Soundness Act 

of 1992 (12 U.S.C. 4561 et seq.)”—“shall be transferred to the [FHFA] 

for employment.” Id. § 1133(a). The Act gives these employees equivalent protections against involuntary separation or reduction in grade or 

compensation as are applied to transferred OFHEO and FHFB personnel. 

Id. § 1133.

II.

You have taken the view that because the position of FHFA Inspector 

General is a new office requiring presidential nomination and Senate 

confirmation under the Reform Act, this office must remain vacant until 

an Inspector General for the FHFA is properly appointed. Under your 

view, because the President has not designated the former FHFB Inspector 

General to act as Inspector General for the FHFA, the former Inspector 

General may not exercise the powers and duties of the FHFA Inspector 

General. The former FHFB Inspector General argues, in contrast, that 

he automatically assumed these powers and duties by operation of the 

Reform Act. We do not understand the former FHFB Inspector General 

to assert that the Reform Act made him the Inspector General for the 

FHFA. But he does assert that, by virtue of the Reform Act’s transition 

provisions, he may exercise the powers of the FHFA Inspector General 
Authority of Former IG for FHFB to Act as IG for FHFA

323

“in trust until the President of the United States appoints a new Inspector 

General.” Memorandum for Edward DeMarco, Deputy Director, FHFA, 

from Edward Kelley, Re: Inspector General Authority at 2 (July 7, 2009). 

In defense of this view, he contends that “the Congress clearly intended 

the continuation of the Office of Inspector General within the [FHFA]” 

and that “[t]he senior official of the FHFA Office of Inspector General 

has the duty and responsibility to conduct the affairs of the Office of 

Inspector General as envisioned by Congress.” Id. at 3. The former FHFB 

Inspector General thus asserts that, in the capacity of acting head of 

the FHFA Office of Inspector General, he may hire personnel for that 

office and that he may employ such personnel at FHFA-specific pay rates, 

without regard to the General Schedule applicable to most federal employees.

In our judgment, the applicable statutes do not enable the former FHFB 

Inspector General to exercise the authority he claims. By its terms, the 

Reform Act nowhere expressly empowers the former FHFB Inspector 

General—or, for that matter, any other specific official—to perform the 

functions and duties of the FHFA Inspector General before an appointment of an FHFA Inspector General by the President. The Reform Act, 

rather, incorporates the relevant provisions of the Inspector General Act 

of 1978 and so provides for the appointment of the FHFA Inspector 

General by the President with the advice and consent of the Senate. See

Reform Act § 1105(a)(5); IG Act § 3(a). By contrast, the Inspector General of the FHFB was appointed by the agency head. See IG Act § 8G.

A general provision in the Reform Act does guarantee that each former 

FHFB employee “shall be transferred to the [FHFA] for employment” 

in “a position with the same status, tenure, grade, and pay as that held on 

the day immediately preceding the transfer.” Reform Act §§ 1313(a), 

(b)(1). We do not believe, however, that this section supports the former 

FHFB Inspector General’s argument. As this Office has indicated in a 

prior opinion, transitional protections like these provisions of the Reform 

Act may be suitable where, as here, an agency is empowered to hire 

employees without regard to usual civil service protections. See Applicability of the Civil Service Provisions of Title 5 of the United States 

Code to the United States Enrichment Corporation, 17 Op. O.L.C. 27, 29 

(1993). We thus concluded in our prior opinion that a provision guaranteeing the same “compensation, benefits, and other terms and conditions 

of employment in effect immediately prior to” an employee’s transfer to 
33 Op. O.L.C. 318 (2009)

324

the new agency “reflect[ed] Congress’s assumption that [the agency in 

question] would be free to set the terms and conditions of employment for 

its employees [without regard to civil service laws], because if [the agency] were bound by civil service statutes Congress would not have needed 

to guarantee transferred employees their existing employment terms and 

conditions.” Id. By the same token, we understand the Reform Act’s 

guarantee of identical “status, tenure, grade, and pay” to ensure that, 

despite the FHFA Director’s authority to “appoint and fix the compensation of” FHFA officers and employees without regard to generally applicable federal pay rates, see 12 U.S.C.A. § 4515(a), employees transferred 

from the FHFB to the FHFA arrive with the same overall terms and conditions of employment that they enjoyed previously. The companion provision barring involuntary separation or reduction in “grade or compensation” without cause then ensures that—again despite the FHFA Director’s 

appointment authority and general exemption from usual federal pay 

scales—the Director may not reassign such employees or reclassify their 

positions in a manner that results in a reduction in grade or pay during 

their first year at the FHFA. See Reform Act § 1313(b)(2). Consistent 

with this interpretation, the House Financial Services Committee’s report 

on an earlier version of this legislation referred to comparable language 

as ensuring that former FHFB employees “will be guaranteed a position 

with the [FHFA] and will retain their benefits for one year following the 

transfer.” H.R. Rep. No. 110-142, at 147.

Accordingly, even assuming the terms “status” and “tenure” might otherwise be given a broader construction, we do not understand these terms 

in this context to guarantee any specific title, duties, or responsibilities 

to transferred employees. See, e.g., Dolan v. U.S. Postal Serv., 546 U.S. 

481, 486 (2006) (“Interpretation of a word or phrase depends upon reading the whole statutory text, considering the purpose and context of the 

statute, and consulting any precedents or authorities that inform the analysis.”). To the contrary, as you have suggested (and as the FHFB Inspector 

General does not dispute), we understand the terms “status, tenure, grade, 

and pay” to refer to the transferred employee’s prior competitive or excepted-service status, cf. 5 C.F.R. § 212.301 (2009) (defining “competitive status”), permanent or temporary tenure, pay grade, and compensation. This interpretation gives the four conjoined terms—“status, tenure, 

grade, and pay”—a consistent overall meaning: all refer to general terms 

and conditions of employment relating to compensation, seniority, and 
Authority of Former IG for FHFB to Act as IG for FHFA

325

job security. See, e.g., Dole v. Steelworkers, 494 U.S. 26, 36 (1990) 

(“words grouped in a list should be given related meaning” (internal 

quotation marks omitted)). In addition, while construing “status” and 

“tenure” to encompass job duties and responsibilities might severely 

constrain the FHFA Director’s authority over the organization of the 

Agency, our interpretation preserves the Director’s broad authority, expressly provided by Congress, to determine functions within the FHFA 

by “delegat[ing] to officers and employees of the Agency any of the 

functions, powers, or duties of the Director.” Reform Act § 1102(a);

12 U.S.C.A. § 4513(b); see also Reform Act § 1101; 12 U.S.C.A. 

§ 4512(c), (d), (e) (establishing Deputy FHFA Directors for “enterprise 

regulation,” “federal home loan bank regulation,” and “housing mission 

and goals,” but providing that, within these broad subject-matter domains, 

the Deputy Directors “shall have such functions, powers, and duties . . . 

as the Director shall prescribe”). Finally, our interpretation harmonizes 

the meaning of the FHFB transition provision with a related statute, 

5 U.S.C. § 3503, referenced in the transition provision itself. Reform Act 

section 1313(a) states that a transfer of employees under this provision 

“shall be deemed a transfer of function for purposes of” this statute, which 

provides that “[w]hen a function is transferred from one agency to another, each competing employee in the function shall be transferred to the 

receiving agency for employment in a position for which he is qualified 

before the receiving agency may make an appointment from another 

source to that position,” 5 U.S.C. § 3503(a) (2006). In accordance with 

our construction of section 1313 here, the language of section 3503 has 

been construed to require only that “an employee is entitled to ‘a job’ for 

which he is qualified,” not “the position most similar to [the employee’s] 

former job.” Ross v. United States, 566 F. Supp. 1024, 1027–28 & n.5 

(D.D.C. 1982).

In contrast with the general transition provisions of section 1313, which 

do not expressly purport to assign duties, the Reform Act contains one 

provision about transition that does expressly assign duties. Section 1101 

of the Reform Act provides that the former OFHEO Director may act as 

FHFA Director in the event of an initial vacancy in that post. See Reform 

Act § 1101; 12 U.S.C.A. § 4512(b)(5). That discrete transition provision 

would have been superfluous if section 1133(b)(1) by itself constituted a 

general assignment of identical duties to all former FHFB employees and 

thus to the FHFB Inspector General. That provision also shows that Con-
33 Op. O.L.C. 318 (2009)

326

gress recognized the possibility of initial vacancies in positions at the 

FHFA, yet made no provision for an interim acting Inspector General. 

“‘[W]here Congress includes particular language in one section of a 

statute but omits it in another section of the same Act, it is generally 

presumed that Congress acts intentionally and purposely in the disparate 

inclusion or exclusion.’” Russello v. United States, 464 U.S. 16, 23 (1983) 

(quoting United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 

1972)); see also, e.g., General Motors Corp. v. United States, 496 U.S. 

530, 538 (1990) (reading statute not to impose a specific deadline on a 

certain regulatory action because “the statutory language does not expressly impose a . . . deadline and Congress expressly included other 

deadlines in the statute”); TRW Inc. v. Andrews, 534 U.S. 19, 28 (2001) 

(holding that “[t]he most natural reading” of a statute is “that Congress 

implicitly excluded a general . . . rule by explicitly including a more 

limited one”).

The absence of an express provision providing for such an assignment 

of duties is also significant in light of the Federal Vacancies Reform Act 

of 1998 (“Vacancies Reform Act”), Pub. L. No. 105-277, div. C, § 151, 

112 Stat. 2681, 2681-611 (as amended). The Vacancies Reform Act 

provides that, absent a recess appointment or an “express[]” statutory 

provision to the contrary, it is “the exclusive means for temporarily authorizing an acting official to perform the functions and duties of any 

office of an Executive agency . . . for which appointment is required to be 

made by the President, by and with the advice and consent of the Senate.” 

5 U.S.C. § 3347(a) (2006). Yet the Vacancies Reform Act provides only 

that “[i]f an officer of an Executive agency . . . whose appointment to 

office is required to be made by the President, by and with the advice and 

consent of the Senate, dies, resigns, or is otherwise unable to perform the 

functions and duties of the office,” either the “first assistant to the office” 

or another officer designated by “the President (and only the President)” 

may, within certain time limits, “perform the functions and duties of the 

office temporarily in an acting capacity.” Id. §§ 3345, 3346. We have 

doubts that the Vacancies Reform Act authorizes interim assignments to 

fill initial vacancies. If, as in this case, no one has previously been appointed to an office, there is no officer who has “die[d]” or “resign[ed]” 

or “is otherwise unable to perform the functions and duties of office,” and 

there thus is no vacancy that the Vacancies Reform Act allows to be 

filled. Cf. Olympic Fed. Sav. & Loan Ass’n v. Office of Thrift Supervision, 
Authority of Former IG for FHFB to Act as IG for FHFA

327

732 F. Supp. 1183, 1195 (D.D.C.) (construing term “required by law to be 

appointed” in prior vacancies statute to permit temporary filling of vacancies only where the officer vacating the position was properly appointed 

and had thus “take[n] office”), appeal dismissed as moot, 903 F.2d 837 

(D.C. Cir. 1990). But even assuming that the Vacancies Reform Act 

would permit someone to be named acting FHFA Inspector General in this 

case, the former FHFB Inspector General’s own submission shows that he 

is neither a properly appointed first assistant nor an officer designated by 

the President to act as FHFA Inspector General. 

To be sure, the Inspector General Act, as amended by the Reform Act, 

provides that “there is established” within the FHFA “an office of Inspector General.” IG Act § 2. But even assuming that this entity has inherent 

functions that its personnel may perform even without a properly appointed or designated Inspector General or acting Inspector General at the head 

of the office, neither the Reform Act nor the Inspector General Act supports the former FHFB Inspector General’s view that the FHFA Office of 

Inspector General was automatically populated with former personnel of 

the FHFB Office of Inspector General by operation of the Reform Act’s

transition provisions. To the contrary, in the Reform Act, Congress “abolished” the FHFB, including its Office of Inspector General, and established a new agency, the FHFA, with its own Inspector General. See

Reform Act §§ 1101, 1301, 1311. And while Congress provided for the 

transfer of FHFB personnel to the FHFA, the statute, as noted, does not 

guarantee these employees any particular substantive responsibilities. 

See id. § 1313; cf. Ross, 566 F. Supp. at 1028. Accordingly, although the 

FHFA Office of Inspector General might well be the natural place for 

transferred former employees of the FHFB Inspector General, the statute 

does not provide for the automatic transformation of the abolished FHFB 

Office of Inspector General into a new FHFA Office of Inspector General.

Finally, our conclusion that the Reform Act should not be construed 

to have authorized the former FHFB Inspector General to act as FHFA 

Inspector General draws support from the fact that the offices of FHFB 

Inspector General and FHFA Inspector General do not have essentially 

equivalent jurisdiction. The Supreme Court has held that Congress may 

assign new duties to an officer without creating a new office, provided the 

new duties are “germane to the office[] already held by” the incumbent, 

Shoemaker v. United States, 147 U.S. 282, 301 (1893); see also The 

Constitutional Separation of Powers Between the President and Congress, 
33 Op. O.L.C. 318 (2009)

328

20 Op. O.L.C. 124, 157–59 (1996), but this Office has indicated that the 

Constitution may require a new appointment when the addition of new 

duties—even duties “germane” to an existing office—is “considerable.” 

Status of the Director of Central Intelligence Under the National Security 

Intelligence Reform Act of 2004, 29 Op. O.L.C. 28, 36 n.2 (2005); see 

also Constitutional Separation of Powers, 20 Op. O.L.C. at 158 (indicating that whether Congress has created a new office depends on “the 

reasonableness of assigning the new duties ‘in terms of efficiency and 

institutional continuity’” and on “whether ‘it could be said that [the officers’] functions . . . [with the additional duties] were within the contemplation of those who were in the first place responsible for their appointment and confirmation’” (quoting Legislation Authorizing the Transfer of 

Federal Judges from One District to Another, 4B Op. O.L.C. 538, 541 

(1980))); Olympic Fed. Sav. & Loan Ass’n, 732 F. Supp. at 1193. Without 

deciding the constitutional issue here, we note that the FHFA Inspector 

General holds materially broader statutory responsibility than did the 

FHFB Inspector General. While the FHFB oversaw only the Federal 

Home Loan Banks, the FHFA also regulates Fannie Mae and Freddie 

Mac—two major financial institutions, see H.R. Rep. No. 110-142, at 96. 

As the Reform Act itself indicates, oversight of Fannie Mae and Freddie 

Mac may raise different regulatory concerns from oversight of the Federal 

Home Loan Banks; the Reform Act thus requires the FHFA Director to 

“consider the differences between the Federal Home Loan Banks and 

[these] enterprises” before issuing any regulations or general guidance 

affecting the Federal Home Loan Banks. See Reform Act § 1201; 12 

U.S.C.A. § 4513(f). Furthermore, the FHFA appears to hold broader 

powers than OFHEO or the FHFB expressly had, including the power to 

place GSEs in receivership in certain circumstances. See Reform Act 

§ 1145; 12 U.S.C.A. § 4617; H.R. Rep. No. 110-142, at 90.

Consequently, the FHFA Inspector General conducts investigations 

with respect to an agency with substantially broader functions, powers, 

and responsibilities than did the FHFB Inspector General. Perhaps not 

surprisingly, while the statute establishing the FHFB provided that its 

Inspector General was to be appointed by the agency head, see IG Act

§ 8G, the Reform Act provides for appointment of FHFA’s Inspector 

General by the President with the advice and consent of the Senate. That 

distinction between the offices is thus also in keeping with our conclusion 

that the Reform Act cannot be read to have automatically, by implication, 
Authority of Former IG for FHFB to Act as IG for FHFA

329

given the former FHFB Inspector General authority to act as Inspector 

General for the FHFA. 

III.

In sum, neither the Reform Act nor the Vacancies Reform Act authorizes the former FHFB Inspector General to assume the functions and 

duties of the FHFA Inspector General pending appointment of a new 

nominee. The answer to your second question—whether the former FHFB 

Inspector General has authority to appoint staff to the FHFA Office of 

Inspector General—follows logically from this answer. The Inspector 

General Act authorizes only the Inspector General to “select, appoint, and 

employ such officers and employees as may be necessary for carrying out 

the functions, powers, and duties of the Office.” IG Act § 6(a)(7). Thus, 

because the former FHFB Inspector General lacks authority to act as 

FHFA Inspector General, he cannot hire staff for the FHFA Inspector 

General’s office. And because we conclude that the former FHFB Inspector General cannot hire staff in the FHFA Office of Inspector General, we 

need not determine at this time what pay rates would apply to any employees who are hired in the future. We therefore do not address your 

third question.

Insofar as the absence of an Inspector General creates practical difficulties for the FHFA, we note that the Reform Act authorizes the FHFA 

Director to “delegate to officers and employees of the [FHFA] any of 

the functions, powers, or duties of the Director, as the Director considers 

appropriate.” Reform Act § 1102(a); 12 U.S.C.A. § 4513(b). As you 

have suggested, this authority might permit the Director to give designated employees certain responsibilities for auditing and monitoring the 

FHFA’s activities.

DANIEL L. KOFFSKY

Deputy Assistant Attorney General

Office of Legal Counsel