Unchecked Power of Consumer Financial Protection Board Unconstitutional

LATEST NEWS: DC Circuit Court Opinion – July 24, 2015

CEI Statements on DC Circuit Court Opinion


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.



> 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


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.




  • 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