With the likelihood that Cordray's recess appointment is also unconstitutional, the status of the agency is murky at best. First, an unconfirmed czar built the agency. Then the agency began operations and started rulings with an unconfirmed director. If the court also rules that Cordray was unconstitutionally appointed director, the CFPB will have been activated without ever having had a director. Just what parts of this agency are valid, if any? Answering that question may require extensive litigation.
The activities of the CFPB have been substantial in the last year. According to ABC News, "[u]nder Cordray's lead, the CFPB has refunded $425 million to consumers from big-name credit card companies, including American Express, Capitol One [sic] and Discover." Given the regulatory complexities and the question of the legal validity of the agency, the air badly needs to be cleared.
Going forward, the administration has two options. First, the administration may comply with the court's order and remove the unconstitutional appointees. Alternatively, they may appeal the decision to the Supreme Court.
Labor law attorneys Bill Trumpeter and Chris Parker observed:
The NLRB's response to this decision has been to say that it disagrees with the D.C. Circuit, that the "no quorum" finding applies only to the unfair labor practices case that was before the Court in Noel Canning, and that it plans to continue on as if the decision never happened.
At least for now, the administration has chosen Option 3: the NLRB intends to ignore the court and continue business as usual.
At the CFPB, ABC News reports, "[f]our days into his second term, President Obama renewed a fight from his first term when he renominated Richard Cordray for head of the Consumer Financial Protection Bureau."
Given the legal questions and litigation surrounding the bureau, Senate confirmation of Cordray or any other director would only compound the problems with the agency. The Senate might be well advised to consider the outcome of litigation prior to becoming embroiled in the turmoil.
The CFPB has been an ongoing political lightning rod, resulting from its clash with the Constitution and other federal policy.