Regulations

Questions about Cordray’s appointment could undermine regulator’s authority

Consumer Financial Protection Bureau is key player in drafting and implementing mortgage, RESPA rules

What happens to the Consumer Financial Protection Bureau’s far-reaching regulations and disclosure mandates governing the mortgage and real estate markets if it turns out that Richard Cordray’s appointment as director was illegal? That’s developing into more than an academic question, now that U.S. Supreme Court has agreed to rule on a case involving three appointments by President Obama to the National Labor Relations Board. Those appointments were made on the same day -- Jan. 4, 2012 -- and used the same controversial legal rationale as his recess appointment of Cordray. A U.S. district court and an appellate court have ruled that Obama’s appointments violated the Constitution. At the time, the Senate was not in a formal recess, but had taken a holiday break after a series of pro forma daily sessions that often lasted barely minutes. Richard Cordray Frustrated by Republican efforts to block his NLRB and CFPB nominees, Obama appointed them anyway, arguing that the...