Validity of Consumer Bureau at Stake in Legal Challenge

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By Carter Dougherty - Jan 31, 2013 12:01 AM ET

A law firm sued by the Consumer Financial Protection Bureau over its treatment of struggling homeowners may be the first to contest the validity of Richard Cordray’s status as the agency’s director after a federal court’s ruling on presidential appointees.

Gary Kurtz, a lawyer representing the Gordon Law Firm of Los Angeles, said he sent a Jan. 29 letter to the bureau asking for a negotiated settlement of the six-month-old case in light of a federal court ruling that invalidated so-called recess appointments similar to Cordray’s.

“I want to give them an opportunity to resolve this without court intervention,” Kurtz said in a telephone interview. “Resolving this informally would preferable.”

Absent a settlement with Gordon, the bureau risks a court challenge that could become a test case for its authority in the wake of recess-appointment ruling. In its July 17 complaint against the firm, the CFPB said Gordon took up-front fees to help homeowners facing foreclosure, then did “little or nothing” for them.

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http://www.bloomberg.com/news/2013-01-31/validity-of-consumer-bureau-at-stake-in-legal-challenge.html

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1. So it begins. (nt)