The Supreme Court announced Monday it would hear a case that calls into question President Obama's recess appointments to the National Labor Relations Board.
Although the NLRB case does not involved Richard Cordray, the director of the Consumer Financial Protection Bureau, his recess appointment was made on the same day as the NLRB appointments. The court's decision may have a big impact on the CFPB.
"At issue are the CFPB's legal powers under the Dodd-Frank Act. The 2010 financial reform law created the agency and said it inherited existing regulatory authority to write new rules that cover all banks. The law also gave the CFPB authority to regulate nonbanks such as debt collectors and payday lenders, but in a drafting error, it said the nonbank authorities were not valid until a Senate-confirmed director of the agency was in place," writes American Banker's Rachel Witkowski.
The Obama administration has argued its recess appointment of Cordray meets the Dodd-Frank law's requirements. But if the Supreme Court invalidates the NLRB appointments, it is likely that a legal challenge to Cordray's recess appointment will occur.
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