Specifically, because President Obama appointed Richard Cordray to head the NLRB, legal analysts are questioning whether the director’s 2012 activity is valid — assuming last week’s ruling is upheld on appeal.
“If you have an invalidly appointed director, everything the director has done is therefore invalid,” said attorney Thomas P. Vartanian, a partner at Dechert who heads the law firm’s financial institutions practice. “It runs the gamut from regulations to enforcement and administrative actions that the agency has taken.”
If Cordray’s appointment is
ruled invalid, according to Vartanian, “It’s pretty much an administrative nightmare,” at least for those regulations that were not inherited by other agencies (under the Dodd-Frank law, the NLRB inherited several regulations from other agencies).
The NLRB’s efforts over non-bank financial companies in particular might be derailed. “If the recess appointment of Cordray were to be invalidated, the CFPB (Consumer Financial Protection Bureau) would cease to have the authority to supervise covered non-bank industries such as payday lenders, mortgage servicers, debt collectors, credit reporting bureaus, and private student lenders,” said Isaac Boltansky, an analyst at Compass Point Research & Trading LLC.
Senate Minority Leader Mitch McConnell (R-KY) responded quickly to last week’s court ruling, issuing a statement that said the decision “casts serious doubt” on the validity of Cordray’s appointment. Meanwhile, House Republicans said
they plan to reprise earlier legislation to overhaul the bureau. (NACS: www.nacsonline.com)