WASHINGTON The Supreme Court said Monday it would hear the case that calls into question several recess appointments President Obama made last year.
The Noel Canning v. National Labor Relations Board case has significant ramifications for Richard Cordray, who was recess appointed as director of the Consumer Financial Protection Bureau on the same day that the NLRB appointments were made. (Technically, Cordray's appointment is not part of the case and would likely require a separate legal challenge to overturn.)
Senate Republicans, many of whom agree Cordray is qualified to lead the agency, have refused to consider his nomination until the structure of the agency is changed, including replacing the single director with a five-member board.
Industry advocates seized on the Supreme Court case on Monday to press that case, arguing that the administration should cut a deal with the GOP.
"For the past two years, CBA [Consumer Bankers Association] has highlighted the CFPB's structural flaws, the inherent political nature of leadership by a sole director, and the high risks of an agency with unchecked powers," said Richard Hunt, president of the CBA, in a press release. "Political posturing aside, there is no reason the CFPB should not have the same structure. After all, it will be the activists who will be calling for a commission when a Republican President selects a director. A balanced approach to supervision and certainty for consumers should be the goal, and Congress has the power to make it so."
The Canning case calls into question the three recess appointments to the NLRB, with plaintiffs arguing that Obama violated the Constitution by making recess appointments while the Senate was still technically in session. The administration has argued it had the power to act because the Senate was holding only "pro-forma" sessions where no actual business was being conducted.
The Supreme Court's decision on the Canning case could have a significant impact on a separate case that, among other things, challenges Cordray's appointment. Two conservative groups and a Texas community bank have challenged the constitutionality of certain parts of the Dodd-Frank Act, including the creation of the CFPB and the recess appointment of its director. Eleven attorneys general have also joined that case.