No guidance after Noel: CFPB director's recess appointment was unconstitutional

Posted on 06/26/2014 at 09:48 AM by John Lande

This morning the United States Supreme Court issued a decision in Noel Canning v. NLRB. We previously profiled this case and its effect on CFPB rules. The Court today ruled that President Obama, who made appointments to the NLRB in addition to Cordray, exceeded the scope of his recess-appointment authority when he made the appointments during an intra-session Senate recess. Though the ruling has an immediate, dramatic impact on the NLRB, it will likely end up as nothing more than a footnote in constitutional law textbooks. The Supreme Court concluded that though the President exceeded his appointment authority in this particular case, the President's appointment authority is much broader than a lower court suggested. The Supreme Court relied on a long held tradition of presidential recess appointments that essentially allows the President to fill any vacancy requiring Senate confirmation if the Senate is not in session for an extended period. Nevertheless, there remains a question as to whether actions the CFPB took under Director Cordray when he was a recess appointee are still valid. There will likely be subsequent litigation over this issue. What is clear is that this ruling will have no impact on the existence of the CFPB, or, in the long run, on the CFPB's ability to use its rulemaking authority.

Categories: Banking Law, John Lande

 

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