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Report: U.S. SC review of NLRB recess appointments could stall Cordray's confirmation

By Jessica M. Karmasek | Jun 26, 2013

WASHINGTON (Legal Newsline) -- The U.S. Supreme Court's decision this week to take up a case over President Barack Obama's recess appointments to the National Labor Relations Board could further complicate Richard Cordray's confirmation as director of the Consumer Financial Protection Bureau.

The CFPB was created by the Dodd-Frank regulatory overhaul and is tasked with overseeing the federal financial laws that specifically protect consumers -- people who keep their money in banks and credit unions, pay for goods and services with their credit cards, and rely on loans to buy homes or pay for college, among other services.

In January, the U.S. Court of Appeals for the District of Columbia ruled that the President's "intrasession appointment" of three new members to the NLRB was an unconstitutional abuse of power.

Cordray was appointed to director of the CFPB the same day as the three NLRB members.

Obama renominated Cordray, a former Ohio attorney general, to the position earlier this year.

On Monday, the nation's high court said it would review Noel Canning v. NLRB and decide whether Obama's recess appointments are unconstitutional. The court will consider the case in its 2013-14 term.

The court's decision could stall Cordray's confirmation.

His confirmation is already slow-moving, with a group of Republican senators saying in February they will oppose the confirmation of any nominee, regardless of party affiliation, to be the CFPB's director.

The senators argue that "key changes" must be made to "ensure accountability and transparency" at the bureau.

In particular, they have issues with how the bureau is set up and believe that no one person -- in this case, Cordray -- should have such power over the American people.

The CFPB, they argue, should be run by a board rather than a director.

The Wall Street Journal reported earlier this week that Sen. Rob Portman, R-Ohio, is heading up a small bipartisan group of senators trying to make changes to the CFPB and how its governed.

An aide for Portman told the Journal that the goal is to come to an agreement that could result in Cordray's confirmation.

One of the proposals includes creating a board that would have a chairman, similar to how the Securities Exchange Commission operates.

A second proposal would be to create a permanent inspector general responsible solely for the CFPB.

The aide told the Journal that the legislation, pending an agreement, could be introduced soon.

But one legal observer says the group has no incentive to resolve the issue.

"They can just sit back and see what the Supreme Court does," Keith Fisher, a lawyer with Ballard Spahr LLP who focuses on the Supreme Court and banking regulation, told the Journal.

From Legal Newsline: Reach Jessica Karmasek by email at

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