Several mortgage industry observers agree that a dark cloud has been cast over President Obama’s recess appointment of Richard Cordray as Consumer Financial Protection Bureau Director, after an appeals court ruling invalidated other recess appointments the President made at the same time.

“The significance of this decision cannot be overstated, as it raises a host of questions about the potential impact of a judicial ruling that Mr. Cordray’s recess appointment was similarly invalid,” said Ballard Spahr's Barbara S. Mishkin.

But if Mr. Cordray’s appointment is invalidated, it is unclear whether any CFPB regulations issued during his tenure may also be struck down. Ballard Spahr’s Jeremy T. Rosenblum noted that the Treasury would have authority to ratify the Truth in Lending Act, the Real Estate Settlement Procedures Act, and the Electronic Funds Transfer Act rules that have been adopted so far.

“It is unclear what procedural hoops it would need to jump through to exercise that authority,” Mr. Rosenblum said.

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Consumer Financial Services