Court Opinion

ID: 810759
Source: CourtListenerOpinion
Date Created: 2012-10-24 14:28:24+00
Date Added: 2024-06-11T18:00:38.723558
License: Public Domain

11-3408-cv, 11-3285-cv
     Town of Babylon v. FHFA, Natural v. FHFA

 1                       UNITED STATES COURT OF APPEALS

 2                           FOR THE SECOND CIRCUIT

 3                              August Term, 2012

 4   (Argued: September 14, 2012          Decided: October 24, 2012)

 5                     Docket Nos. 11-3408-cv, 11-3285-cv

 6   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

 7   TOWN OF BABYLON,
 8
 9               Plaintiff-Appellant,

10                v.

11   FEDERAL HOUSING FINANCE AGENCY, EDWARD DEMARCO, in his capacity
12   as Acting Director of Federal Housing Finance Agency, OFFICE OF
13   THE COMPTROLLER OF THE CURRENCY, a component of the United
14   States Department of the Treasury, JOHN G. WALSH, Acting
15   Comptroller of the Currency,
16
17               Defendants-Appellees,

18   CHARLES E. HALDEMAN, JR., in his capacity as Chief Executive
19   Officer of the Federal Home Loan Mortgage Corporation, MICHAEL
20   J. WILLIAMS, in his capacity as Chief Executive Officer of the
21   Federal National Mortgage Association,
22
23               Defendants.
24   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

25   NATURAL RESOURCES DEFENSE COUNCIL, INC.,
26
27               Plaintiff-Appellant,
28
29                v.

30   FEDERAL HOUSING FINANCE AGENCY, EDWARD DEMARCO, Acting
31   Director, FEDERAL HOUSING FINANCE AGENCY, OFFICE OF THE

                                          1
 1   COMPTROLLER OF THE CURRENCY, a component of the United States
 2   Department of the Treasury, JOHN G. WALSH, Acting Comptroller
 3   of the Currency,
 4
 5             Defendants-Appellees.
 6
 7   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
 8   Before:   WINTER, CABRANES, and CARNEY, Circuit Judges.

 9       This opinion disposes of two separate appeals from two

10   district courts heard in tandem.    Plaintiffs-appellants Town of

11   Babylon and the National Resources Defense Council appeal from

12   grants of motions to dismiss in favor of appellees Federal

13   Housing Finance Agency and the Office of the Comptroller of the

14   Currency in the Eastern District of New York (Leonard D.
15   Wexler, Judge) and Southern District of New York (Shira A.
16   Scheindlin, Judge), respectively.    Appellants argue that the

17   district courts erred in concluding that 12 U.S.C. § 4617

18   precludes judicial review of a Directive issued by the FHFA to

19   Fannie Mae, Freddie Mac, and the Federal Home Loan Banks and

20   also that they lacked standing to pursue their claims against

21   the Office of the Comptroller of the Currency.   We affirm.
22                                 ERIK A. ORTMANN (William J.
23                                 Tinsley Jr., Christopher K.
24                                 Smith, on the brief), Goldberg &
25                                 Connolly, Rockville Centre, New
26                                 York, for Plaintiff-Appellant
27                                 Town of Babylon.
28
29                                 HOWARD N. CAYNE (Lisa S. Blatt,
30                                 Asim Varma, on the brief), Arnold
31                                 & Porter LLP, Washington, D.C.,
32                                 for Stephen E. Hart, Federal
33                                 Housing Finance Agency, for
34                                 Defendant-Appellees Federal
35                                 Housing Finance Agency and Edward

                                                  2
 1                                  DeMarco.
 2
 3                                  THOMAS A. MCFARLAND (Varuni
 4                                  Nelson, Assistant United States
 5                                  Attorney, Julie L. Williams,
 6                                  Daniel P. Stipano, Horace G.
 7                                  Sneed, Douglas B. Jordan, Office
 8                                  of the Comptroller of the
 9                                  Currency, on the brief),
10                                  Assistant United States Attorney
11                                  for Loretta E. Lynch, United
12                                  States Attorney for the Eastern
13                                  District of New York, for
14                                  Defendant-Appellees Office of the
15                                  Comptroller of the Currency and
16                                  John G. Walsh.
17
18                                  KATHERINE KENNEDY (Benjamin H.
19                                  Longstreth, on the brief),
20                                  Natural Resources Defense
21                                  Council, New York, New York, for
22                                  Plaintiff-Appellant Natural
23                                  Resources Defense Council.
24
25                                  BERTRAND MADSEN (Benjamin H.
26                                  Torrance, on the brief),
27                                  Assistant United States
28                                  Attorneys, for Preet Bharara,
29                                  United States Attorney for the
30                                  Southern District of New York,
31                                  for Defendant-Appellees Office of
32                                  the Comptroller of the Currency
33                                  and John G. Walsh.
34
35
36   WINTER, Circuit Judge:
37        This opinion disposes of separate appeals from two different

38   district courts.   We heard the appeals in tandem because of the

39   similarity of the issues raised.

40        The Town of Babylon and the Natural Resources Defense

41   Council, Inc. (“NRDC”) appeal from orders entered by Judge Wexler

42   in the Eastern District of New York and Judge Scheindlin in the

                                        3
 1   Southern District of New York, respectively.           The district courts

 2   dismissed appellants’ complaints against the Federal Housing

 3   Financing Agency (“FHFA”)1 and the Office of the Comptroller of

 4   the Currency (“OCC”).2      Appellants claimed that a Directive of

 5   the FHFA and a Bulletin of the OCC adversely impacted the

 6   operation of first-lien Property Assessed Clean Energy (“PACE”)

 7   programs.    The district courts dismissed the actions on the

 8   grounds that:     (i) the claims against the FHFA were precluded by

 9   12 U.S.C. § 4617(f), and (ii) appellants lacked Article III

10   standing to pursue claims against the OCC.          We affirm.

11                                    BACKGROUND

12         PACE programs are operated by local governments.            They

13   encourage property owners to make home improvements that reduce

14   energy consumption, promote clean energy, create local jobs, and

15   reduce greenhouse gas emissions, thereby mitigating the effect of

16   global climate change.      The local governments offer financing to

17   commercial and residential property owners to fund the cost of

18   the property improvements.       Typically, the owners repay the

19   particular local government, which calls the financing advances

           1
             The Federal Housing Finance Agency, or FHFA, was established in 2008
     by the Housing and Economic Recovery Act (“HERA”) to regulate Fannie Mae,
     Freddie Mac, and/or the Federal Home Loan Banks (“FHLBs”). See 12 U.S.C. §
     4511(a), (b)(2). Under 12 U.S.C. § 4617, the FHFA has the power to appoint
     itself as a conservator or receiver of Fannie Mae, Freddie Mac, and/or the
     FHLBs. The FHFA appointed itself conservator over both Fannie Mae and Freddie
     Mac in September 2008 and remains conservator over both entities. See Fed.
     Hous. Fin. Agency, Statement of FHFA Director James B. Lockhart Announcing
     Conservatorship of Fannie Mae and Freddie Mac (2008).
           2
             The Office of the Comptroller of the Currency is a federal agency that
     charters, regulates, and supervises all national banks.

                                           4
 1   “assessments,” on a scheduled periodic basis.    If a scheduled

 2   payment is not made, in many PACE programs, the delinquent amount

 3   attaches to the real property as a “tax lien.”   Such a lien has

 4   priority over any other lien attached to the property, including

 5   new and preexisting mortgage liens, and stays with the property

 6   in the event of sale.    However, some PACE programs do not carry

 7   such priority and are not affected by this litigation.   The Town

 8   of Babylon operates a PACE financing program styled the Long

 9   Island Green Homes program (“LIGH”).    It includes a lien-priority

10   provision.

11        NRDC alleges that “first lien status is critical to the

12   success of PACE programs” because junior lienholders typically

13   lose the entire value at stake in a foreclosure.   In contrast, it

14   alleges, “PACE lien seniority is immaterial to holders of the

15   underlying mortgages,” because the assessments are relatively

16   small, the risk of default is lessened by the improvement in the

17   owner’s financial status due to energy cost savings, and the

18   value of the collateral is increased.

19        The Federal National Mortgage Association, commonly known as

20   Fannie Mae, and the Federal Home Loan Mortgage Corporation,

21   commonly known as Freddie Mac, are federally chartered

22   corporations of a type commonly referred to as Government-

23   Sponsored Enterprises.   The entities together own or guarantee

24   close to half of the home loans in the United States, and the

25   value of the combined debt and mortgage-related assets of the two

                                       5
 1   entities along with the Federal Home Loan Banks (“FHLB”) exceeds

 2   $5.9 trillion.       As noted by Judge Wexler in the Town of Babylon

 3   matter, “The position held in the home mortgage business by

 4   Fannie Mae and Freddie Mac make them the dominant force in that

 5   market. . . . [I]t is not a stretch to assume that lenders in the

 6   home financing market are guided in their decisions by Fannie Mae

 7   and Freddie Mac requirements.”          Town of Babylon v. Fed. Hous.

 8   Fin. Agency, 790 F. Supp. 2d 47, 49-50 (E.D.N.Y. 2011).                In
 9   September 2008, as discussed in more detail infra, FHFA appointed
10   itself conservator over Fannie Mae and Freddie Mac.

11         On July 6, 2010, the FHFA issued a Directive (“FHFA

12   Directive” or “Directive”) directing Fannie Mae and Freddie Mac

13   to take “prudential actions,” “not limited to” certain enumerated

14   suggestions not pertinent here,3 to protect themselves against

15   safety and soundness concerns -- risks -- raised by PACE programs

           3
               These suggestions were as follows:

                   Adjusting loan-to-value ratios to reflect the maximum
                   permissible PACE loan amount available to borrowers in
                   PACE jurisdictions;
                   Ensuring that loan covenants require approval/consent
                   for any PACE loan;
                   Tightening borrower debt-to-income ratios to account
                   for additional obligations associated with possible
                   future PACE loans;
                   Ensuring that mortgages on properties in a
                   jurisdiction offering PACE-like programs satisfy all
                   applicable federal and state lending regulations and
                   guidance.

     Fed. Hous. Fin. Agency, Statement on Certain Energy Retrofit Loan Programs
     2 (2010).

                                             6
 1   that impose priority or first-liens on participating properties

 2   like LIGH.    Fed. Hous. Fin. Agency, Statement on Certain Energy

 3   Retrofit Loan Programs 2 (2010).      The Directive also directed the

 4   FHLBs “to review their collateral policies in order to assure

 5   that pledged collateral is not adversely affected by energy
 6   retrofit programs that include first liens.”     Id.

 7        The concerns expressed were related only to the

 8   subordination of mortgage liens to PACE-related first-lien

 9   priorities.   Nothing in the Directive or other associated

10   publications of the FHFA suggests any concern over PACE programs

11   that do not impose first-lien priorities.     Indeed, FHFA expressly

12   disclaimed any such concern in its Directive     Id. (“Nothing in

13   this Statement affects the normal underwriting programs of the

14   regulated entities or their dealings with PACE programs that do

15   not have a senior lien priority.”).

16        The same day, the OCC issued “Supervisory Guidance” in the

17   form of a Bulletin (“Bulletin” or “OCC Bulletin”) stating that

18   national banks “need to be aware of the FHFA’s directives” and

19   “should take steps to mitigate exposures and protect collateral

20   positions,” as well as “consider the impact of tax-assessed

21   energy advances on . . . asset valuations” when investing in

22   mortgage-backed securities.   Office of the Comptroller of the

23   Currency, OCC Bull. No. 2010-25, Property Assessed Clean Energy

24   (PACE) Programs 1-2 (2010).

25        Subsequent to the actions of the FHFA and the OCC, Fannie

                                       7
 1   Mae and Freddie Mac each issued statements declaring that they

 2   would no longer purchase mortgages secured by properties subject

 3   to first-lien PACE obligations.    See Freddie Mac, Bull. No. 2010-

 4   20, Mortgages Secured by Properties with an Outstanding Property

 5   Assessed Clean Energy (PACE) Obligation 1 (2010); Fannie Mae,

 6   Announcement SEL-2010-12, Options for Borrowers with a PACE Loan

 7   2 (2010).   On February 28, 2011, the FHFA, by letter, directed

 8   Fannie Mae and Freddie Mac to “continue to refrain from

 9   purchasing mortgage loans secured by properties with outstanding

10   first-lien PACE obligations,” and “undertake other steps as may

11   be necessary to protect their safe and sound operations from

12   these first-lien PACE programs.”      Letter from Alfred M. Pollard,

13   General Counsel, FHFA, to Timothy J. Mayopoulos, General Counsel,

14   Fannie Mae, and Robert E. Bostrom, General Counsel, Freddie Mac

15   (February 28, 2011).

16        The alleged result of these various statements has been

17   reduced participation in, and diminished viability of, LIGH and

18   other first-lien PACE programs.    The Town of Babylon and the NRDC

19   then brought the present actions asserting a host of legal

20   theories, including, as relevant to this appeal, violation of the

21   Administrative Procedure Act (“APA”), 5 U.S.C. § 706, for acting

22   in an arbitrary and capricious manner; violation of the APA, 5

23   U.S.C. § 553(b),(c), and the Housing and Economic Recovery Act

24   (“HERA”), 12 U.S.C. § 4526(b), for failure to solicit notice and

25   comment; and violation of the National Environmental Policy Act

                                       8
 1   (“NEPA”), 42 U.S.C. § 4332(2)(C), for failure to prepare an

 2   environmental impact statement.     See Complaint at 14-18, ¶¶ 53-

 3   75, Town of Babylon v. Fed. Hous. Fin. Agency, 790 F. Supp. 2d 47

 4   (E.D.N.Y. 2011) (No. 10-cv-4916); Second Amended Complaint at 19-

 5   20, ¶¶ 55-66, NRDC v. Fed. Hous. Fin. Agency, 815 F. Supp. 2d 630

 6   (S.D.N.Y. 2011) (No. 10-cv-7647).      Both district courts concluded

 7   that the claims against the FHFA for the issuance of the

 8   Directive were expressly precluded by 12 U.S.C. § 4617(f).      Town

 9   of Babylon, 790 F. Supp. 2d at 54; NRDC v. Fed. Hous. Fin.
10   Agency, 815 F. Supp. 2d at 642.     Both district courts also

11   concluded that appellants lacked constitutional standing to

12   challenge the OCC’s actions because the redressability

13   requirement was not satisfied.    Town of Babylon, 790 F. Supp. 2d

14   at 55-56; NRDC v. Fed. Hous. Fin. Agency, 815 F. Supp. 2d at 639-

15   41.   The district courts therefore dismissed appellants’

16   respective complaints.   Town of Babylon, 790 F. Supp. 2d at 56;

17   NRDC v. Fed. Hous. Fin. Agency, 815 F. Supp. 2d at 642.      For the
18   reasons stated infra, we affirm.
19                               DISCUSSION

20         We review a district court’s grant of a motion to dismiss

21   under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) de

22   novo, Klein & Co. Futures, Inc. v. Bd. of Trade, 464 F.3d 255,

23   259 (2d Cir. 2006), accepting as true factual allegations made in

24   the complaint, and drawing all reasonable inferences in favor of
25   the plaintiffs.   Holmes v. Grubman, 568 F.3d 329, 335 (2d. Cir.
26   2009).

                                        9
 1   a) Section 4617(f)

 2        In 2008, the FHFA appointed itself as the conservator of

 3   Fannie Mae and Freddie Mac pursuant to authority granted by 12

 4   U.S.C. § 4617.    The appointment was based on a determination that

 5   “unsafe or unsound condition[s]” existed.    12 U.S.C. §

 6   4617(a)(3)(C).    See Fed. Hous. Fin. Agency, Statement of FHFA

 7   Director James B. Lockhart Announcing Conservatorship of Fannie

 8   Mae and Freddie Mac (2008).

 9        Section 4617 empowers the FHFA as a conservator to “take

10   such action as may be -- (i) necessary to put the regulated

11   entity in a sound and solvent condition; and (ii) appropriate to

12   carry on the business of the regulated entity and preserve and

13   conserve the assets and property of the regulated entity.”    12

14   U.S.C. § 4617(b)(2)(D).   Judicial review of “the exercise of

15   powers or functions of the [FHFA] as a conservator” is prohibited
16   “[e]xcept as provided in [Section 4617].”    Id. § 4617(f).
17   Nothing in Section 4617 authorizes judicial review in the present

18   circumstances.
19        Appellants argue that the Directive was not issued pursuant

20   to FHFA’s powers as a conservator.    They note that even as a

21   conservator, FHFA continues to have powers as a regulator,

22   pursuant to 12 U.S.C. § 4526, that when exercised are subject to

23   the notice and comment procedures of the APA and reviewable under

24   5 U.S.C. § 704.   They then argue that FHFA exercised this general

25   regulatory authority, rather than its powers as a conservator,

26   when issuing the Directive because either:   (i) the agency’s

                                      10
 1   conservator powers do not include the power to issue the

 2   Directive; or (ii) the agency did not rely on powers as a

 3   conservator when issuing the Directive.

 4         Argument (i) lacks any basis in the statutory language or

 5   legislative purpose.      The FHFA Directive to Fannie Mae and

 6   Freddie Mac related concerns that PACE priority liens enhanced

 7   the risks associated with subordinated mortgages and directed the

 8   entities to protect themselves against such risks.            As a

 9   conservator, FHFA was expressly empowered to take “such action as

10   may be -- (i) necessary to put [Fannie Mae and Freddie Mac] in a

11   sound and solvent condition; and (ii) appropriate to . . .

12   preserve . . . [their] assets and property.”           12 U.S.C. §

13   4617(b)(2)(D).     Directing protective measures against perceived

14   risks is squarely within FHFA’s powers as a conservator.

15         Even if FHFA’s powers as a regulator and conservator

16   overlap, the exclusion of judicial review over the exercise of

17   the latter would be relatively meaningless if it did not cover an

18   FHFA directive to an institution in conservatorship to mitigate

19   or avoid a perceived financial risk.

20         As for argument (ii), the FHFA’s supposed silence in the

21   Directive regarding the authority under which it was acting is
22   irrelevant.4    The statute excludes judicial review of “the

           4
             Much ink has been consumed in arguments concerning a later statement
     by the FHFA (issued after these actions were filed) that it had acted in its
     role as a conservator in issuing the Directive to Fannie Mae and Freddie Mac.
     We need not address the issue because of our conclusion that the exclusion of
     judicial review under Section 4617(f) was triggered by the conservatorship and
     the nature of the Directive. The subsequent statement certainly did not
     render the Directive subject to judicial review.

                                          11
 1   exercise of powers or functions” given to the FHFA as a

 2   conservator.    Id. § 4617(f).     A conclusion that the challenged

 3   acts were directed to an institution in conservatorship and

 4   within the powers given to the conservator ends the inquiry.             See

 5   Volges v. Resolution Trust Corp., 32 F.3d 50, 52 (2d Cir. 1994)

 6   (interpreting the scope of a virtually identical jurisdictional

 7   bar in the Financial Institutions Reform, Recovery, and

 8   Enforcement Act of 1989, and concluding that no jurisdiction

 9   existed where “[t]he proposed sale of the Volges mortgages

10   plainly f[ell] within the ‘powers or functions of the [Resolution

11   Trust Corporation] as a conservator or receiver’”).           No

12   particular talismanic incantation of authority is required to
13   trigger Section 4617(f).5
14   b) Standing to Pursue Claims Against the OCC

15        “Article III, Section 2 of the Constitution limits the

16   [subject matter] jurisdiction of the federal courts to the

17   resolution of ‘cases’ and ‘controversies.’”          Mahon v. Ticor Title

          5
            The FHFA’s Directive addressed not only Fannie Mae and Freddie Mac but
     also the FHLBs. However, unlike Fannie Mae and Freddie Mac, the FHLBs are not
     under a conservatorship. Therefore the FHFA’s Directive, insofar as it is
     directed to the FHLBs, is not shielded from judicial review by Section
     4617(f).
           However, to the extent that appellants challenge the FHFA Directive as
     it applies to the FHLBs, they have failed to show that the alleged injury is
     likely to be redressed by the relief sought. Unlike the Directive’s direction
     to Fannie Mae and Freddie Mac to undertake affirmative action, the Directive
     required the FHLBs only “to review their collateral policies in order to
     assure that pledged collateral is not adversely affected by [PACE] programs
     that include first liens.” Fed. Hous. Fin. Agency, Statement on Certain
     Energy Retrofit Loan Programs 2 (2010). For reasons discussed in Part b,
     infra, withdrawal of the Directive would not make it likely that the FHLBs
     would alter their practices.

                                          12
 1   Ins. Co., 683 F.3d 59, 62 (2d Cir. 2012) (citation and internal

 2   quotation marks omitted).    “In order to ensure that this . . .

 3   case-or-controversy requirement is met, courts require that

 4   plaintiffs establish their standing as the proper parties to

 5   bring suit.”    Selevan v. N.Y. Thruway Auth., 584 F.3d 82, 89 (2d

 6   Cir. 2009) (quoting W.R. Huff Asset Mgmt. Co. v. Deloitte &

 7   Touche LLP, 549 F.3d 100, 106 (2d Cir. 2008)) (internal quotation

 8   marks omitted).    To establish Article III standing, one must

 9   show:    (i) injury-in-fact, (ii) causation, and (iii)
10   redressability.    Id.   The district courts found with regard to

11   these claims that the last element, redressability, was absent.

12   We agree.

13           Appellants allege both procedural injury -- the lack of

14   solicitation of notice and comment as required by the APA, 5

15   U.S.C. § 553, and of an environmental impact statement as

16   required by NEPA, 42 U.S.C. § 4332(2)(C) -- as well as

17   substantive injury -- arbitrary and capricious agency action by

18   the OCC -- resulting from the OCC’s promulgation of the Bulletin.
19           Where, as here, a litigant complaining of procedural or

20   substantive injury is not the regulated party, the litigant must

21   demonstrate that favorable action by the agency is likely to

22   result in favorable action by the regulated party in addition to

23   demonstrating a link between the procedural or substantive injury
24   to the litigant and the adverse agency action.    See Lujan v.
25   Defenders of Wildlife, 504 U.S. 555, 561 (1992) (noting the

26   general rule that “it must be likely, as opposed to merely

                                       13
 1   speculative, that the injury will be redressed by a favorable

 2   decision” (internal quotations omitted)); id. at 562 (explaining

 3   that “when the plaintiff is not himself the object of the

 4   government action or inaction he challenges, standing is not

 5   precluded, but it is ordinarily ‘substantially more difficult’ to

 6   establish.” (quoting Allen v. Wright, 468 U.S. 737, 758 (1984)));

 7   id. at 570-71 (plurality opinion) (“[R]edress of the only injury

 8   in fact respondents complain of requires action . . . by the

 9   individual funding agencies; and any relief the District Court

10   could have provided in this suit against the Secretary was not
11   likely to produce that action.”); Simon v. E. Ky. Welfare Rights
12   Org., 426 U.S. 26, 42-43 (1976) (“The complaint here alleged only

13   that petitioners, by the adoption of [the] Revenue Ruling . . .

14   had ‘encouraged’ hospitals to deny services to indigents. . . .

15   It is purely speculative whether the denials of service specified

16   in the complaint fairly can be traced to petitioners’

17   ‘encouragement’ or instead result from decisions made by the
18   hospitals without regard to the tax implications.”); St. John’s
19   United Church of Christ v. FAA, 520 F.3d 460, 463 (D.C. Cir.

20   2008) (holding that a plaintiff injured by a regulated third

21   party must demonstrate a likelihood that the third party would

22   change action in the event that the defendant agency changes

23   action, notwithstanding the fact that plaintiff has alleged a

24   procedural injury).

25        Excluding the harm alleged to have resulted from the non-

26   reviewable Directive to Fannie Mae and Freddie Mac, the only

                                    14
 1   injury alleged is the harm from the alteration of lending

 2   practices by national banks -- the institutions that are

 3   regulated by the OCC but are not parties to this litigation.

 4   However, if the OCC Bulletin were vacated, the national banks

 5   would remain entirely free to treat PACE-related properties on an

 6   unfavorable basis.6

 7         Town of Babylon’s pleadings and affidavits contain no

 8   allegation or assertion that the national banks regulated by the

 9   OCC would act differently were the OCC Bulletin vacated.             NRDC’s

10   complaint similarly lacks any allegation that national banks

11   regulated by the OCC would alter current practices if the OCC

12   Bulletin were vacated.

13         NRDC did provide declarations by three municipal officials

14   with experience on the city-planning side of PACE-program

15   implementation.     Each stated that if both the FHFA Directive and

16   the OCC Bulletin were vacated, then national banks’ lending
17   practices would revert to the status quo ante (pre-July 6, 2010).
18         However, the FHFA Directive, as applied to Fannie Mae and
19   Freddie Mac, cannot be vacated for reasons stated above, and none

           6
             Therefore, the instant matter is distinguishable from New York Public
     Interest Research Group v. Whitman, 321 F.3d 316 (2d Cir. 2003). In Whitman,
     we stated briefly and in dicta that the lax standard traditionally applied to
     claims of procedural injury applied in the context of an injury caused in part
     by the actions of a regulated party. Id. at 326. Whitman involved a petition
     to the EPA regarding the failure to issue objections to draft permits issued
     by the state agency that were not in compliance with the Clean Air Act. Id.
     at 319, 323. If the EPA were to object to the permits, the cessation of the
     injury-causing action (that led to uncertainty about harm caused by the
     stationary pollution source) would have necessarily followed. 42 U.S.C. §
     7661d(b)(3). Here, even if the Bulletin were vacated, the banks regulated by
     the OCC would still be entirely free to adjust mortgage practices regarding
     LIGH and other first-lien PACE program participating homes.

                                          15
 1   of the declarations stated, or could state, that vacatur of the

 2   OCC Bulletin alone would result in national banks resuming their

 3   status quo ante lending practices.   Nothing in the OCC Bulletin

 4   compelled national banks to take any action.    The Bulletin is

 5   labeled “Supervisory Guidance,” and is couched in entirely

 6   permissive language.   See Office of the Comptroller of the

 7   Currency, OCC Bull. No. 2010-25, Property Assessed Clean Energy

 8   (PACE) Programs 1-2 (2010) (“National banks need to be aware of
 9   the FHFA’s directives . . . . National bank lenders should take
10   steps to mitigage exposures and protect collateral positions

11   . . . . [B]anks that invest in mortgage backed securities . . .

12   should consider the impact of tax-assessed energy advances.”

13   (emphasis added)).   The Bulletin alerts recipient banks only to

14   the need for calculating a risk that varies from locality to

15   locality.   Were the Bulletin withdrawn, the need for a

16   calculation would remain.

17        A return to the status quo ante by the banks after vacatur

18   of the Bulletin would be a likely result only if the banks
19   calculated the risks and benefits exactly as they are alleged to

20   be by NRDC.   That is not a necessary result.   More critically,

21   however, even if the OCC Bulletin were vacated, Fannie Mae’s and

22   Freddie Mac’s refusal to purchase mortgages of properties subject

23   to first-lien PACE programs would remain in force.   Any

24   contention that national banks would continue to lend on the same

25   terms as before the issuance of the OCC Bulletin must simply

26   ignore the impact of Fannie Mae’s and Freddie Mac’s changes in

27   policy.

                                     16
1        Therefore, we conclude that appellants have failed to show

2   that it is likely, as opposed to merely speculative, that their

3   claims against the OCC would be redressed by vacatur of the

4   Bulletin, and the claims against the OCC were properly dismissed

5   for lack of standing.

6                              CONCLUSION

7        For the reasons above, the district courts’ judgments are

8   affirmed.

9

                                   17