In the case of Lightfoot v. Cendant Mortgage Corp., 2016, the U.S. Supreme Court ruled that Fannie Mae's charter does not grant it the ability to bring any suit in any court. The dispute began when homeowners sued Cendant Mortgage Corporation for alleged misconduct during refinancing transactions and claimed they were directed towards disadvantageous loans due to their race. The issue was whether Fannie Mae could be sued under state law or if its federal charter protected it from such lawsuits, as it argued that its enabling statute allowed them to sue and be sued in any court of competent jurisdiction, state or federal. However, Justice Sonia Sotomayor wrote on behalf of a unanimous court stating that this clause only allows suits in either state or federal courts already established by Congress but doesn't automatically allow all cases involving Fannie Mae into federal courts.

In the dissenting opinion for Lightfoot v. Cendant Mortgage Corp., Justice Thomas disagreed with the majority's interpretation of 12 U.S.C §1710(a). He argued that this statute does not grant federal jurisdiction over all civil cases involving Fannie Mae. Instead, he believed it merely allows Fannie Mae to sue and be sued in any court of competent jurisdiction, state or federal. According to him, a lawsuit against Fannie Mae could only be heard in a federal court if there was diversity of citizenship between parties or if the case raised a substantial question of federal law. The phrase "of competent jurisdiction" limits where suits can take place based on existing rules about subject-matter competence rather than creating new ones as interpreted by the majority opinion.