Cordray 1
Richard Cordray, nominee for director of the Consumer Financial Protection Bureau, is sworn in before testifying at a confirmation hearing before the Senate Committee on Banking, Housing and Urban Affairs on March 12, 2013 in Washington, D.C. - 

Richard Cordray has been the acting director of the Consumer Financial Protection Bureau for the past 15 months. The key word there is "acting." He hasn't been approved by the Senate. That became an issue this week when the head of an influential House committee vowed to block Cordray from appearing before his panel.

House Financial Services Committee Chairman Jeb Hensarling wrote Cordray a letter this week. The Texas Republican says Cordray is barred from addressing his committee until he’s confirmed by the Senate. Cordray’s already testified on the Hill a bunch of times. He appeared before the Senate Banking Committee just yesterday.

People testifying on the Hill often look pained, like it’s about as much fun as a root canal. So maybe Cordray should be happy that he won’t have to go before Hensarling’s committee? Or is this a serious challenge to the CFPB? Deepak Gupta is a former CFPB attorney.

“What you worry about is that there’s a chilling effect,” he says.

Gupta isn't worried about what he calls political posturing on Capitol Hill, but he says a recent court case has cast a cloud of legal uncertainty over the bureau. In January, a federal appeals court said the appointment of another Obama administration official was unconstitutional because it was a recess appointment, made while Congress wasn’t in session. Richard Cordray was appointed the same way. Gupta says now it could be hard for the CFPB to enforce rules intended to protect consumers.

He explains, “Anyone that’s sued by the bureau or threatened with an enforcement action has the option of raising the constitutionality of the director’s appointment.”

Already a Texas bank is suing the CFPB over just that issue, and if a court throws out Cordray’s appointment, there will be even more questions about the bureau’s authority and its rules on everything from prepaid debit cards to foreclosure. Howell Jackson teaches law at Harvard and wonders about the fate of rules the CFPB is now in the process of writing.

“Their rule making authority in certain areas might be constrained,” says Jackson.

All of the political and legal challenges to the CFPB have left consumers confused. John Browne is semi-retired, running a plant nursery part-time in Washington state. He’s checked out the bureau’s website and liked what he saw. He doesn’t like all of the controversy over Richard Cordray’s appointment, which he thinks is mainly political.

“A challenge to an appointment like that should be specificm," he says. "It shouldn’t just be, I don’t like him. I think he’s philosophically in the wrong pew.”

Browne says, regardless of Cordray’s philosophy,  it would be helpful for consumers to have a full-fledged director at the CFPB.