- Consumer Financial Protection Bureau Remains In Limbo
- March 20, 2013 | Authors: Lloyd B. Chinn; Harris Michael Mufson; Steven J. Pearlman
- Law Firms: Proskauer Rose LLP - New York Office ; Proskauer Rose LLP - Chicago Office
The authority and leadership of the Consumer Financial Protection Bureau (CFPB), a body created by Dodd-Frank to regulate consumer protection of financial products and services, continues to remain in limbo in the wake of the recent ruling by the United States Court of Appeals District of Columbia Circuit invalidating President Obama’s recess appointments to the National Labor Relations Board.
On January 4, 2012, President Obama issued a recess appointment to install Richard Cordray as the CFPB’s Director through the end of 2013. Cordray’s recess appointment to lead the CFPB came on the same day as the voided NLRB appointments and followed staunch opposition by Republican members of Congress who have been pushing to replace the CFPB’s single director with a commission and to change its funding structure so its budget is subject to congressional approval.
Dodd Frank vested the CFPB with authority “to prescribe rules and issue orders and guidance to carry out the purposes and objectives of Federal consumer financial laws, and to prevent evasions thereof. (12 U.S.C. §5512(b)). In addition, the Act (12 U.S.C. §5567(a)) prohibits retaliation by employers against individuals performing tasks related to the offering or provision of a consumer financial product or service who have:
(1) provided, caused to be provided or is about to provide or cause to be provided, information to the CFPB that is subject to the jurisdiction of the CFPB or any rule, order, standard, or prohibition prescribed by the CFPB;
(2) testified or will testify in any proceeding resulting from any provision of law that is subject to the jurisdiction of the CFPB, or any rule, order, standard, or prohibition prescribed by the CFPB;
(3) filed, instituted, or caused to be filed or instituted any proceeding under any Federal consumer financial law; or
(4) objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee (or other such person) reasonably believed to be in violation of any law, rule, order, standard, or prohibition, subject to the jurisdiction of, or enforceable by, the CFPB.
Because Section 1057’s definition of protected activity hinges on the CFPB’s authority, any invalidation of a CFPB rule, order, standard or prohibition may impact pending and future whistleblower claims under Section 1057.