TEXAS COMMUNITY BANK, SENIORS AND
FREE ENTERPRISE GROUPS FILE SUIT CHALLENGING DODD-FRANK
Unchecked Power of Consumer Financial Protection Board Unconstitutional
LATEST NEWS: DC Circuit Court Opinion – July 24, 2015
CEI Statements on DC Circuit Court Opinion
OVERVIEW
On June 21, 2012, the Competitive Enterprise Institute and the 60 Plus Association joined the State National Bank of Big Spring, Texas, in challenging the constitutionality of several major provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Our argument was based on the unprecedented, unchecked power Dodd-Frank gives to agencies like the Consumer Financial Protection Bureau (CFPB), the Financial Stability Oversight Council (FSOC), and the Orderly Liquidation Authority.
“The Consumer Financial Protection Bureau's lack of checks and balances violates the Constitution’s separation of powers,” said CEI senior attorney Hans Bader. “Its director is like a czar. He is not accountable to anyone, and can't be fired even if voters elect a president with different ideas about how to protect consumers.”
By February 2013, 11 states had joined the case, now referred to as State National Bank of Big Spring, Texas et al. v. Lew et al. However, in August 2013, a federal judge dismissed the lawsuit on standing and ripeness grounds in a flawed decision that ignored the very real harm Dodd-Frank has inflicted on the plaintiffs and on Americans who rely on banks to provide loans for everything from their home to their small business.
Subsequently, the plaintiffs appealed this decision and a hearing was held in November 2014 before a panel of the U.S. Court of Appeals for the District of Columbia Circuit.
On July 24, 2015, the D.C. Circuit Court affirmed CEI, 60 Plus Association, and the State National Bank in Big Spring, Texas, had standing to challenge the constitutionality of the CFPB and of the recess appointment of its director. While the court upheld the other parts of the district court’s decision, regarding the lack of standing by us and the states to challenge the FSOC and the liquidation authority, this ruling is nonetheless a major victory.
PRESS RELEASES
- July 24, 2015 – CEI Statements on DC Circuit Court Opinion
- November 19, 2014 – Dodd-Frank Constitutional Challenge to Be Argued in Appeals Court Today
- August 2, 2013 – Adverse District Court Opinion on Dodd-Frank Deeply Flawed, Case Now on Appeal
- February 13, 2013 – Eight More States Join Constitutional Challenge to Dodd-Frank Act
- September 20, 2012 – Three States Join Constitutional Challenge to Dodd-Frank
- June 21, 2012 – Dodd-Frank Unconstitutional Power-Grab, Says New Lawsuit
LEGAL FILINGS
> View Original Complaint – June 21, 2012
> View Amended Complaint – September 20, 2012
> View Government's Motion to Dismiss and response from CEI General Counsel Sam Kazman – November 20, 2012
> View Private Plaintiffs' Opposition to Motion to Dismiss – February 27, 2013
> View States' Opposition to Motion to Dismiss – February 27, 2013
> View District Court grant of Motion to Dismiss – August 1, 2013
CEI RESEARCH
How Dodd-Frank Harms Main Street by Iain Murray – July 2015
This paper discusses the specific problems associated with Dodd-Frank: the federal power grab, the big costs, the unintended consequences of regulations, the burdens imposed on Main Street, and the constitutional concerns with Dodd-Frank’s Consumer Financial Protection Bureau.
Why Competition Offers a Solution to Too Big to Fail by John Berlau – July 2015
This paper offers a set of competition-based remedies for the current problems, like the Too-Big-To-Fail rationale used for bank bailouts and regulatory barriers, including: forcing regulators to adopt standards and deadlines for approving new banks and lifting restrictions on bank ownership.
RELATED OP-EDS & ARTICLES
- ‘The Biggest Kiss’; Mitt Romney was right: Dodd-Frank is a gift to big banks, by C. Boydon Gray and Adam J. White – The Weekly Standard, October 29, 2012
- Kill Dodd-Frank (II), by Michael Greve – Library of Law & Liberty, October 6, 2012
- Dodd-Frank's 'Orderly Liquidation' Is Out of Order, by Scott Pruitt and Alan Wilson, September 25, 2012
- About The Dodd-Frank Act, George Washington Would Be Turning Over In His Grave, by J.W. Verret – Forbes, July 2, 2012
- Dodd-Frank: The Economic Case for Repeal, by Peter J. Wallison – The American, June 27, 2012
- Why Dodd-Frank Is Unconstitutional, by C. Boyden Gray and Jim R. Purcell – The Wall Street Journal, June 22, 2012
- Dodd-Frank's liquidation plan is worse than bankruptcy, by Peter J. Wallison – Bloomberg, June 11, 2012
- Dodd-Frank, the real threat to the Constitution, by C. Boyden Gray – The Washington Post, Friday, December 31, 2010
- Dodd-Frank and the Return of the Loan Shark by Todd Zywicki – The Wall Street Journal, January 4, 2011
- Is the Cordray Appointment Constitutional? > Obama's Power Grab Sets Precedent Democrats Will Regret by John Berlau, USNews.com, January 6, 2012
- Forget Jamie Dimon — Congress needs to look in the mirror by John Berlau – Foxnews.com, June 20, 2012
- Columnist Wants Consumer Bureau to Be 'Big Brother,' by John Berlau – Spectator.org, January 17, 2012
- Obama's 'Recess' Picks Shred Checks and Balances, by John Berlau – Moneynews.com, January 5, 2012
- Why Your Bank Is Charging More Fees, by John Berlau – Nationalreview.com, October 5, 2011
- Dodd-Frank financial ‘reform’ law is unconstitutional violation of separation of power, by Hans Bader – San Francisco Examiner, January 5, 2011
- Dodd-Frank financial reform violates property rights and racially discriminates, by Hans Bader –Examiner, January 9, 2011
- The “Obama Law” Causes Starvation and Unrest in Africa’s Congo, by Hans Bader – Examiner, August 10, 2011
- Poor people lose jobs due to Dodd-Frank conflict-mineral rules; costs billions, by Hans Bader – Examiner, July 28, 2011
RELATED RESEARCH
- The Consumer Financial Protection Bureau: Savior or Menace? by Todd Zywicki – Mercatus Center
- The Dodd-Frank Wall Street Reform & Consumer Protection Act of 2010: Is It Constitutional? by C. Boyden Gray, John Shu – The Federalist Society
- Dodd-Frank and Community Banks – Your Guide to 12 Critical Issues by the American Bankers Association
- Magical thinking: the latest regulation from the Financial Stability Oversight Council, by Peter Wallison – The American Enterprise Institute
- The error at the heart of the Dodd-Frank Act, Peter Wallison – AEI Financial Services Outlook
- Dodd-Frank and the Housing Finance Reform, by Peter Wallison – AEI Online
- ObamaCare and the Dodd-Frank Act, by Peter Wallison – AEI Financial Services Outlook
- The Dodd-Frank Act: Creative Destruction, Destroyed, by Peter Wallison – AEI Online
HEARINGS & TESTIMONY
- House Financial Services’ Oversight and Investigations Subcommittee – How DFA Affects Local Communities – Testimony by Jim Purcell, president and CEO of State National Bank in Big Spring, Texas, July 19, 2012
VIDEO
- Fox Business, October 26, 2012, C. Boyden Gray interview on why Dodd-Frank favors big banks over smaller banks
LETTERS
- CEI, 60 Plus Association letter to Congress on Cordray nomination, January 30, 2013
- We Must Have Real Accountability From Our Overseers – Hans Bader – Wall Street Journal, March 21, 2011
- Dodd-Frank shields Frannie and Freddie – Hans Bader – Richmond Times, Dispatch, January 27, 2012
- Financial stability council violates the Constitution – Hans Bader – The Washington Post, January 4, 2011
- Ms. Warren Should Take Aim at Confusing Federal Law – Hans Bader – Wall Street Journal, October 9, 2010