A bank can challenge the constitutionality of the new Consumer Financial Protection Bureau now, and doesn’t have to wait until the CFPB issues rules that punish the bank, a federal appeals court ruled Friday.
The U.S. Circuit Court of Appeals for the District of Columbia also said the bank has standing to challenge the appointment of the bureau’s director, Richard Cordray, whom President Obama first named to the position during a recess appointment.
The appeals court sent both issues back to a lower federal trial court for a full ruling.
The CFPB was one of the controversial parts of the post-Wall Street crash Dodd-Frank legislation that imposed new controls on major financial institutions whose actions were blamed for spawning the 2008 meltdown.
Critics argue the bureau, which was granted extensive independent powers, goes too far. Republicans even tried to neuter the bureau by filibustering to prevent a director from being named.
Mr. Obama, in early 2012, moved to circumvent the Senate, issuing recess appointments for Mr. Cordray and for several members of the National Labor Relations Board, who were also being blocked. A unanimous Supreme Court has already overturned the NLRB appointments.
Mr. Cordray eventually won full confirmation to his post a year and a half after his recess appointment.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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