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Senate Bill Would Strip Authority from CFPB and NLRB, Halt Funding

Joe Mont | February 1, 2013

A Senate bill to cut off funding for the Consumer Financial Protection Bureau and National Labor Relations Board and undo their actions during the past year has been filed in response to a court decision that declared recess appointments made by President Barack Obama to be invalid.

On Jan. 25, a three-judge panel of the D.C. Circuit Court of Appeals rendered a unanimous decision in the case of Noel Canning v. National Labor Relations Board. The plaintiff challenged the authority of the NLRB on the basis that three members, put in place through recess appointments made by the President, were unconstitutional and should not count toward a needed quorum.

Although not addressed in that decision, the standing of Richard Cordray, CFPB's director, is also expected to be challenged on the basis that it too was a recess appointment made while Congress was still, technically, in session.

The Restoring the Constitutional Balance of Power Act of 2013, introduced yesterday by Senators Mike Johanns (R-Neb.), Lamar Alexander (R-Tenn.), and John Cornyn (R-Texas), would prohibit the NLRB from “undertaking or enforcing” any activities commencing on or after Jan. 4, 2012 (the date of the recess appointments) if they required the approval of a quorum of board members.

The legislation would also block the CFPB's next transfer of funds from the Federal Reserve to carry out any actions that require the approval of a director. The senators charge that Cordray has been “illegitimately serving as CFPB director.”

“If they won't take down their ‘Open for Business' sign and put up one that says ‘Help Wanted,' then the Senate will,” Alexander said in a statement.

"These agencies have been operating under a ruse for more than a year,” Johanns said. “Any decisions or regulations made by the people who have no right to be there are invalid. This legislation forces them to stop functioning as if they legitimately hold office and recognize the reality that the President overstepped his constitutional authority."

Earlier this week, Johanns spoke on the Senate floor and called for the immediate resignation of the NLRB's recess appointees.

“[Its] Chairman indicates they'll continue to conduct business as usual even though a unanimous appeals court has deemed the appointments of all but one member of the board to be unconstitutional,” he said. “Decisions by the NLRB are felt across the country and it is not fair for the board to say to the court, ‘Go pound sand.'”