CFPB Director Cordray's Nomination Unconstitutional? – NMP Skip to main content

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
Markets Anxious As Fed Opens 2-Day Meeting

Investors, mortgage brokers & bankers await latest policy statement on fighting inflation

Regulation and Compliance
Jan 25, 2022
Ginnie Mae Streamlines FHA Advanced Loan Modification program

Documentation changes eliminate requirements for recordation and title insurance.

Regulation and Compliance
Jan 24, 2022
'A Long Road To Normal'

Nominated again to lead The Fed, Powell tells Senate committee to expect three rate hikes, but 'if we have to raise interest rates more over time, we will.'

Regulation and Compliance
Jan 11, 2022
CFPB: Complaint Response Worsens At Big 3 Credit Bureaus

Report claims Equifax, Experian, and TransUnion routinely failed to fully respond to consumers with errors.

Regulation and Compliance
Jan 10, 2022
The Fed Names Chairs, Deputy Chairs For 12 Reserve Banks

In recent years, the Federal Reserve System has worked to increase the overall diversity of the Reserve Bank and branch boards of directors and continues to build on those efforts.

Regulation and Compliance
Jan 06, 2022
The Fed: Rate Hike Likely Coming in June

Federal Open Market Committee's December minutes reveal discussion of first hike in federal funds rate in 2Q of 2022, as well as of ending asset purchases by March.

Regulation and Compliance
Jan 05, 2022