The U.S. Supreme Court has decided to review the legality of several recess appointments made by President Obama which has huge implications for the Consumer Financial Protection Bureau and the mortgage rules that have been approved by CFPB director Richard Cordray.
Monday morning the high court issued a list of cases it will review this fall that includes a decision by the U.S. Circuit Court of Appeals for the District of Columbia that invalidated recess appointments the president made to fill vacant seats on the National Labor Relations Board.
The circuit judges ruled the Senate was not in recess when the appointments were made—just on a short break.
The case Canning v. NLRB does not directly apply to the CFPB. But Cordray’s recess appointment was made on the same day as the NLRB directors.
The Supreme Court will likely schedule oral arguments for this fall and hand down a decision later this year.
A decision to uphold the circuit court’s decision would raise serious questions about
Meanwhile, lenders and servicers should continue to implement the QM and other CFPB rules that have been finalized. “You can’t disregard existing regulations on the theory that they might get thrown out,” according to Larry Platt, a partner at K&L Gates.
