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CFPB Director Cordray's Nomination Unconstitutional?
Jan 25, 2013

The U.S. Circuit Court of Appeals for the D.C. Circuit has ruled that President Obama’s “recess” appointments to the National Labor Relations Board (NLRB) last January are invalid. “The D.C. Circuit Court today reaffirmed that the Constitution is not an inconvenience but the law of the land, agreeing with the owners of a family-owned business who brought the case to the Court,” Senate Republican Leader Sen. Mitch McConnell said. Sen. McConnell and 41 of his Senate colleagues filed an amicus brief in the case, Noel Canning v. NLRB, challenging the constitutionality of the NLRB appointments last year. The suit was brought by Noel Canning, a local, family-owned business in Washington State that bottles and distributes soft drinks. The company challenged the NLRB’s determination that it must enter into a collective bargaining agreement with a labor union. In its ruling today, the Court said, “Allowing the President to define the scope of his own appointments power would eviscerate the Constitution’s separation of powers.” The Court determined that: “An interpretation of ‘the Recess’ that permits the President to decide when the Senate is in recess would demolish the checks and balances inherent in the advice-and-consent requirement, giving the President free rein to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch, or even when the Senate is in session and he is merely displeased with its inaction. This cannot be the law.” The NLRB nominees could not win the filibuster-proof 60 votes needed to be approved by the Senate, Obama last year employed a rarely used presidential maneuver to appoint his candidates. The White House is permitted to bypass the Senate approval process and appoint senior federal officials and agency chiefs for a restricted period of time while the Senate is recess, or on vacation. Obama argued that the White House acted appropriately and the NLRB appointments were made during a recess while the Senate was away for the holidays for 20 days. “For the same reasons, this decision now casts serious doubt on whether the President’s ‘recess’ appointment of Richard Cordray to the Consumer Financial Protection Bureau, which the President announced at the same time, is constitutional,” McConnell said. The ruling could potentially prevent some of the CFPB's recently-issued enforcements toward the mortgage industry from being enacted, including recent measures taken on industry issues such as loan originator (LO) compensation, mortgage servicers, high-cost mortgages, and qualified mortgages (QMs) and the ability-to-repay. The 42 Senators retained former Assistant to the Solicitor General Miguel Estrada to file the amicus brief in the case.
Jan 25, 2013
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