ARLINGTON, Va.-While legal and political wrangling continue around Richard Cordray's appointment as director of the Consumer Financial Protection Bureau, credit unions are being urged to continue to work to comply with all the rules set by the new agency.
"My view is credit unions should proceed with due deliberation toward the effective dates of all the new CFPB rules and not hold back in anticipation that in some way the rules might be abrogated," said NAFCU President Fred Becker. "Maintain course and speed."
In late January a federal appeals court ruled that three National Labor Relations Board members were illegally seated as recess appointees last year by President Obama (Credit Union Journal, Jan. 28). The appeals court only ruled on the merits of the NLRB appointments, but Cordray was appointed CFPB director under the same circumstances at the same time. Republican Sen. Mike Johanns (R-NE) has called for Cordray's resignation, as well as for a government investigation to determine how to unwind any regulations imposed by the two agencies, which he says would now be void because of the court's ruling (see related story, page 10).
"The opinion issued from the Court of Appeals does not directly impact the CFPB," said CUNA General Counsel Mary Dunn. "That was a challenge to the National Labor Relations Board. But there is a similar case challenging CFPB authority that is ascending now in the same circuit but in a lower court."
Lawyers Seeking 'Distinctions'
CUNA EVP-General Counsel Eric Richard noted that overlaps exist on how the director of the CFPB and the NLRB board members were appointed. "But there also may be distinctions, and I am sure lawyers from the CFPB are now trying to figure out the distinctions." Richard and Dunn did not speculate on outcomes, only saying that lawyers will be battling the issues for some time. It is expected the White House will appeal the Court of Appeals ruling to the Supreme Court.
In the case of Cordray's appointment, Becker sees a possibility that a deal will be struck. "The Republicans in the Senate have had concerns with regard to the CFPB's structure. What might happen now is some sort of arrangement where the president agrees to changes in the CFPB structure in exchange for Mr. Cordray's appointment."
Senate Republicans have been digging in on the issue for the last two years, refusing to consider any nominee to head the CFPB without first a number of changes being made, one of which is replacing a single director with a five-member commission and subjecting it to the congressional appropriations process.
The Obama administration has not given in, saying the Dodd-Frank Act already decided the issue.
On Feb. 13, NAFCU will hold a free two-hour webcast, the first in its new CFPB Mortgage Reform Webcast Series, which will touch on some of the issues surrounding the CFPB. The event is open to NAFCU members and non-members.
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Senator Calls For Resignation Of CFPB Director
Congress Takes New Aim At Consumer Financial Protection Bureau
Court Ruling Jeopardizes CFPB Appointment
President's CFPB Bid Seen Opening Old Wounds
