One client facing a supervisory visit from the CFPB called Kaplinsky wondering whether it should turn the inspectors away at the door. His advice: Absolutely not. "When they arrive, give them coffee," he said. "Don't treat them any differently. It won't help you."
Troutman Sanders partner John Lynch, who leads the firm's financial services litigation group, agreed that "most companies are under the assumption that they still have to follow the rules."
Still, the D.C. Circuit decision and looming uncertainly over Cordray's appointment could make a difference in the short-term for companies facing agency subpoenas known as civil investigative demands or other enforcement actions.
"If you have a [civil investigative demand] against you right now, you probably have more negotiating leverage," Lynch said. "There is some uncertainty, but the question is, what is the value of that uncertainty at the negotiating table?"
Cordray's recess appointment is being challenged in a case pending in the U.S. District Court for the District of Columbia brought by a Texas community bank, the Competitive Enterprise Institute and others. The government argues that the parties lack standing because they have not suffered any actual injury from bureau actions.
Even if that case is dismissed on procedural grounds, Rubin of Hunton & Williams predicted, "It's only a matter of time before another company brings its own constitutional challenge."
Ultimately, the solution may need to come from Congress, not the courts.
On Jan. 24, the day before the D.C. Circuit issued its decision, President Obama renominated Cordray to head the bureau. Last year, Republicans in the U.S. Senate refused to consider his nomination unless the agency were first restructured as a five-member commission and made subject to the congressional appropriations process.
The recess appointment was a way to side-step those demands, but the president will not have that luxury this time around.
Venable partner Jonathan Pompan said the court decision "gives substantial leverage to Senate Republicans who are looking for any opportunity to push Democrats and the president" to restructure the agency.