Posted on 09/18/2013 at 01:21 PM by John Lande
This blog previously covered a challenge to the constitutionality of the CFPB, Financial Stability Oversight Counsel (FSOC), and Richard Cordray's recess appointment. The lawsuit, titled State National Bank of Big Spring, et al. v. Timothy Geithner, et al., was brought in the United States District Court for the District of Columbia. On August 1, 2013, the court dismissed the lawsuit for lack of standing. In other words, the court concluded that the plaintiffs in this lawsuit were not harmed and therefore the Constitution does not permit them to bring a lawsuit. The court found that the lead plaintiffs, State National Bank of Big Spring, theory of injury is based on guesswork. The same is true for several states that also joined the lawsuitAlabama, Georgia, Kansas, Michigan, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas, and West Virginia. The fundamental problem for the bank, states, and other plaintiffs is that they have not yet been subject to any enforcement action pursuant to Dodd-Frank or the regulations implementing Dodd-Frank. As a result, they have not suffered any injury, and the Constitution requires an actual injury in order for the federal courts to intervene. The fight isn't over, however. A day after the court's ruling, the plaintiffs in this lawsuit filed their notice of appeal to the United States Court of Appeals for the District of Columbia. This means the case is far from over, but the CFPB and Richard Cordray have overcome a major challenge.
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- John Lande
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