Supreme Court Ruling Could Have Monumental CFPB Impact

The Consumer Financial Protection Bureau may be affected by the Supreme Court’s decision to review an appellate court case invalidating President Barak Obama’s recess appointments to the National Labor Relations Board.

Even though CFPB Director Richard Cordray’s recess appointment was separate from the three NLRB appointments, all were done on Jan. 4, 2012 using the same process. A federal appeals court ruled in January 2013 that the president violated the Constitution by making the NLRB appointments as the Senate was actually in recess.

“Should the court invalidate the NLRB appointments, the potential impact on the CFPB would be monumental,” said attorneys with Ballard Spahr in a statement regarding the Supreme Court’s agreement to review the case. “This would call into question the validity of past CFPB actions, particularly any action involving the CFPB’s exercise of authority that was newly created by the Dodd-Frank Act, and the CFPB’s ability to act in the future.”

For the NLRB vs. Noel Canning case, the Supreme Court instructed involved parties to brief and argue “whether the President’s recess-appointment power may be exercised when the Senate is convening every three days in pro forma sessions.”

The Ballard Spahr attorneys expect the Supreme Court to release a decision by the end of 2013 or early next year.

Written by Alyssa Gerace

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