High Court Takes Case That Will Decide CFPB Director’s Fate

WASHINGTON -- The Supreme Court agreed today to review a case about whether the White House violated the constitution and did not have the power to make certain recess appointments last year, potentially settling the political battle over who may head the Consumer Financial Protection Bureau.

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The case concerns President’s Obama’s recess appointments to the National Labor Relations Board, which were made the same day the President appointed Richard Cordray director of the CFPB, while Republicans in the Senate fought to block the nominations. Though Senate Republicans maintained a skeletal presence while Congress broke for vacation in order to deny a recess in fact, the President appointed Corday and the NLRB members to abbreviated appointments to bypass the Senate.

A federal appeals court ruled in January that the White House violated the constitution and did not have the power to make recess appointments to the labor relations board because the Republicans had effectively prevented an actual congressional recess. The NLRB appealed the ruling in March.

Cordray's status has been in limbo during the legal fight and his appointment is scheduled to expire at year-end if he is not confirmed by the Senate to a full five-year term. Senate Republicans have vowed to continue their blocking of Cordray until the President and Senate Democrats agree to change the structure of the CFPB to make it a five-person board, instead of a single directorship.

A ruling barring the recess appointments could invalidate the dozens of new rules enacted by the CFPB under Cordray’s leadership.

The litigation battle comes after Cordray and the NLRB board nominees could not win the filibuster-proof 60 votes needed to be approved by the Senate in efforts over the past couple years. The White House is permitted to bypass the Senate approval process and appoint senior federal officials and agency directors for a restricted period of time while the Senate is in recess, or on vacation.

Seeking to block the appointments, Republicans set up so-called pro forma legislative sessions of Congress, in which little or no business is conducted. It was during one of these pro-forma sessions that President Obama appointed the NLRB and Cordray nominees. The appeals court, however, ruled that the Senate was technically in session at the time.


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