Not so fast CFPB: Federal Court ruling calls President's recess appointment of Richard Cordray into question

Earlier today, a unanimous panel for the United States Court of Appeals for the D.C. Circuit held that President Obama's recess appointment of three Members of the National Labor Relations Board ('NLRB') is invalid. The basis of the ruling is that the United States Senate, which must give its 'advice and consent' to certain nominees, was not in 'recess' when President Obama made the appointments. As a result, the three NLRB appointees could not take office until the Senate had a chance to vote on whether to confirm them. Why does this matter to banks? The Consumer Financial Protection Bureau's chief Richard Cordray was appointed during the same Senate 'recess' period. This blog has already profiled a case challenging Mr. Cordray's appointment, and this decision from the D.C. Circuit will give ammunition to the challengers in that lawsuit. The D.C. Circuit's decision does place a cloud over all of the NLRB's actions since the recess appointments. It remains to be seen what impact this will have, and what impact it could have on the CFPB's actions if Mr. Cordray's appointment is ultimately ruled invalid. This blog will continue to cover the fallout as it develops.