Alan S. Kaplinsky, Practice Leader of Ballard Spahr’s Consumer Financial Services Group, said a federal appeals court’s decision to invalidate President Obama’s three recess appointments to the National Labor Relations Board will “absolutely” affect his pick to head the Consumer Financial Protection Bureau, Richard Cordray.

Mr. Kaplinsky said it’s doubtful, however, that the courts hold a solution to the problem raised by a decision from the U.S. Court of Appeals for the D.C. Circuit. He said there is a “strong likelihood” that if the case goes to the U.S. Supreme Court, it will probably agree with the D.C. Circuit.

“So there is a need for a political solution,” Mr. Kaplinsky said. “Obama and the Republicans are going to have to make a deal: either the Republicans agree not to hold up Cordray’s nomination, or to make some changes to CFPB by subjecting the management of that agency to a five-person commission, rather than a sole director, and subjecting CFPB to the congressional appropriations process, instead of getting funding by the Federal Reserve.”

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Consumer Financial Services