WASHINGTON—Today’s ruling by a federal court invalidating several presidential appointments could threaten last year’s recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau, according to Republican leaders who brought the challenge.

Senate Minority Leader Mitch McConnell, R-Ky., said today’s ruling casts "serious doubt" on the constitutionality of the president's recess appointment of Cordray, who the President nominated just yesterday for the full five-year term.

A federal appeals court ruled this morning that President Obama's controversial appointments for three members to the National Labor Relations Board were unconstitutional, finding that the President ignored the Senate's "advise and consent" role by appointing them to the board while the Senate was still in session.

Those appointments were made the same day Obama named Cordray as the first director of the CFPB, bypassing Senate Republicans who blocked the Codray nomination to a full term because of opposition to the structure of the new consumer agency.

The main question disputed by Republicans is whether the Senate was in a “recess” when President Obama made the appointments. The appointments came when Senate Republicans, mindful of the President’s ability to make recess appointments, posed for brief “sessions” in order to say the Senate was not in a formal “recess," thereby preventing the President from making recess appointments.

Today's ruling raises a variety of questions. First, if the NLRB appointments are illegal, than what about Cordray and the CFPB? And if Cordray's appointment is invalid, does that also invalidate the multitude of new rules issued by the new consumer agency over the past month, including a broad range of mortgage rules?

Credit union observers doubt it will effect the recent rules.  Carrie Hunt, NAFCU general counsel,  said even if Cordray’s appointment is invalidated, it should not have any impact on the new rules. “The chances of them having a roll-back is very slim,” Hunt told the Credit Union Journal this afternoon.

Republican leader McConnell said today’s ruling clearly jeopardizes the Cordray appointment. "This decision now casts serious doubt on whether the presidents 'recess' appointment of Richard Cordray ... which the president announced at the same time, is constitutional," he said in a statement.

White House Press Secretary Jay Carney rebutted that claim, saying the ruling "has no bearing on Richard Cordray."

Cordray's appointment is currently being challenged in a separate lawsuit, which also argues other provisions of the Dodd-Frank Act — which created the CFPB — also violate the Constitution.

Subscribe Now

Authoritative analysis and perspective for every segment of the credit union industry

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.