Texas bank sues to overturn key element of Dodd-Frank

It’ll be at least Monday — and quite possibly later next week — before we get the Supreme Court’s ruling on Obamacare. In the meantime, a Texas bank filed a federal lawsuit today seeking to overturn a key provision of the other major legislative achievement of the Obama era: the Dodd-Frank banking law. From The Hill:

A Texas community bank is filing suit in U.S. District Court to challenge the constitutionality of the Dodd-Frank financial reform law.

In particular, the suit will contend that the Consumer Financial Protection Bureau (CFPB), created by the law, lacks sufficient checks and balances and, in the words of the CEO of State National Bank, is “simply unconstitutional.”

“No other federal agency or commission operates in such a way that one person can essentially determine who gets a home loan, who can get a credit card and who can get a loan for college,” said Jim Purcell, head of the Big Spring, Texas, bank. “Dodd-Frank effectively gives unlimited regulatory power to this so-called Consumer Financial Protection Board, also known as CFPB, with a director who is not accountable to Congress, the President or the Courts.”

News of the filing is just now getting out, so details are still scarce. The American Enterprise Institute’s James Pethokoukis posted a press release from the plaintiffs about their filing that gets into more detail about the constitutional complaints:

– Congress exercises no “power of the purse” over the CFPB, because the agency’s budget — administered essentially by one person — comes from the Federal Reserve, amounting to approximately $400 million that Congress cannot touch or regulate.

– The President cannot carry out his constitutional obligation to “take care that the laws be faithfully executed,” because the President cannot remove the CFPB Director except under limited circumstances.

– Judicial review of the CFPB’s actions is limited, because Dodd-Frank requires the courts to give extra deference to the CFPB’s legal interpretations.

The plaintiffs claim in their suit that Dodd-Frank gives an agency of unelected government bureaucrats unrestrained power. They argue this unaccountable power over the daily lives of the American people results in a lack of public accountability, creating a power grab over every U.S. citizen.

The language about “power grab over every U.S. citizen” certainly reminds one of the constitutional complaints about Obamacare’s individual mandate. The three-pronged attack on each branch of government’s inability to rein in the CFPB will make for a very interesting legal case.

On a side note: The attorney for the plaintiffs is a man named Boyden Gray, a former White House counsel for George H.W. Bush and, under George W. Bush, the U.S. envoy to the European Union — in which capacity I got to know him during my time in Brussels. Gray is regarded as an expert in administrative law, and I always found him to be not only intelligent and thoughtful but very serious. He clearly favors a light regulatory touch, but he does not strike me as the kind of lawyer to take on a frivolous legal challenge to a major piece of legislation. His involvement leads me to believe there may be a substantive case here.

– By Kyle Wingfield

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147 comments Add your comment

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
12:41 pm

YES! Americans strike another blow against liberal fascism and for freedom, liberty, and free-market capitalism.

carlosgvv

June 21st, 2012
12:42 pm

“a light regulatory touch”

Excuse me, but didn’t that kind of thinking get us banks who made disasterously bad decisions that nearly wrecked our economy?

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
12:43 pm

didn’t that kind of thinking get us banks who made disasterously bad decisions
———————

No, that kind of thinking had nothing to do with Democrats choosing to not pay their mortgage and other bills.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
12:44 pm

How’s that “heavy regulatory touch” working out for our economy.

Watch Obozocare get smacked down. Watch Dodd-Frank get smacked down. Watch President Romney free our economy and preside over real economic growth.

resno2

June 21st, 2012
12:45 pm

The fact that Barney Frank was involved in its creation should be reason enough.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
12:48 pm

I wonder if the idiots remembered to put a severability clause in that turd.

Road Scholar

June 21st, 2012
12:49 pm

“His involvement leads me to believe there may be a substantive case here.”

No, there is money to be made! Win or lose!

Hillbilly D

June 21st, 2012
12:50 pm

Some of this is over my head but basically this case will go whichever way Anthony Kennedy wants it to.

Rafe Hollister, suffering through Oblamer's ineptocracy

June 21st, 2012
12:52 pm

to “take care that the laws be faithfully executed,”

Like our president ever cared about “faithfully executing” laws he did not believe in.

Hillbilly D

June 21st, 2012
12:53 pm

No, there is money to be made! Win or lose!

That’s pretty much the case in everything to do with the legal system now days, isn’t it?

Samantha

June 21st, 2012
12:55 pm

Dodd Frank is a disaster. This law shows us the contempt that the progressives have for the constituion and thier desires to see eilites ruling the rest of us.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
12:57 pm

When Obozo hears that part about taking care that “the laws be faithfully executed” it reminds him of his time in Indonesia and his Muslim faith.

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
12:58 pm

Hey, let’s elect the Vietnam Draft Deferment King, Mitt Romney!

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
12:59 pm

Samnatha, how is it a disaster?

Dusty

June 21st, 2012
1:02 pm

I LUV those Texans! They can smell the scent of government overreach like a houndog on a hunting trip!

Keep it up and my regards to their fine governor. He knows how to serve his state and his country.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
1:03 pm

Draft deferments?

Please, tell us which branch of the military Coward Obozo served in.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
1:07 pm

It’s a disaster because the idiots in the Obozo regime who are writing the implementing regulations make no disctinction between the biggest banks and the small community banks. Small banks are now saddled with huge paperwork and management burdens.

Thanks, Democrats. Community bankers can now spend their time answering to the government’s new regulations instead of making small business loans and mortgages.

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
1:08 pm

There was no draft when Obama was of age. Kind of hard to do a deferment when there is nothing to defer from, ya think?

Dusty

June 21st, 2012
1:11 pm

Would the RECITER OF THE DEMOCRATIC PROPAGANDA MANUAL known as Finn please refrain from the overused lines we have heard so long? We know it is chapter five on Romney Remakes for Run downs.

Finn loves that old twisted “hint hint” method but it do get dull!!

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
1:11 pm

Small banks are now saddled with huge paperwork and management burdens.

Those small banks that have been failing for the last 5 years? of which GA leads the nation in bank failures? Those small banks?

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
1:12 pm

Dusty,
Just reinforcing the message, ya know? Every little bit helps….

Grasshopper

June 21st, 2012
1:13 pm

“Please, tell us which branch of the military Coward Obozo served in.”

Black Panthers? Weather Underground?

Dekalb Comments

June 21st, 2012
1:14 pm

Samantha @ 12:55

Please use spell check or review basic grade school spelling rules before posting. It may give your posting greater credibility.

The funny thing about posts like yours are that you make claims without providing a single piece of evidence to support your claims. Dodd-Frank is only now being implemented. If I recall correctly even with the Consumer Protection Board in place, certain provisions are introduced over time.

Given the fact that reckless behavior by American banks nearly brought the entire world economy to collapse, I am willing to give this bill a chance to work. The bill can always be improved provided both sides, Democrats and Republicans, are actually willing to work together.

But the status quo with the banks engaging in egregious behavior (e.g. robo-signing), betting against investments they were selling to their own customers, etc. was not acceptable. This bill is an attempt to address the worst behavior.

You use the term “elites”. That term is bantered around by conservatives. Can you please define what you mean by elites? Economic data shows that in fact our economy is controlled by a very small number of extremely wealthy individuals, the so-called, job creators. But they didn’t create jobs during the two Bush administrations even with massive tax cuts.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
1:14 pm

Those small banks?
——————-

Yes, those small banks. The ones that were destroyed by Democrats not paying their mortgages.

mike

June 21st, 2012
1:16 pm

Yes we got to sue anything the President comes up with. We have to keep the screwing of the American citizens among the financial institutions and wall street. I suppose we can blame all the bank failures in Georgia on the residents who have money in those banks.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
1:17 pm

But they didn’t create jobs during the two Bush administrations even with massive tax cuts.
———————–

And yet unemployment dropped after those tax cuts were passed.

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
1:20 pm

It doesn’t matter what is in the bill to these Cons. What matters is creating witch hunts to keep the spotlight off their incompetent choice for a President.

When the debates start and Romney has to answer the tough questions and explain his policy, the whole facade is coming down. Get the popcorn ready.

iggy

June 21st, 2012
1:21 pm

“No, that kind of thinking had nothing to do with Democrats choosing to not pay their mortgage and other bills.”

HEAR HEAR!!! (Thunderous APPLAUSE)

Dekalb Comments

June 21st, 2012
1:22 pm

Lil’ Barry Bailout @ 1:17

Let’s see we were losing between 300,000 and 500,000 jobs a month when Bush left office. Those tax cuts were in place at that time and have been since. So I would expect we would have had zero unemployment when Bush skulked off into the shadows.

iggy

June 21st, 2012
1:23 pm

“There was no draft when Obama was of age. Kind of hard to do a deferment when there is nothing to defer from, ya think?”

It wouldnt matter anyway. The Kenyan wouldve just ran home to Kenya.

carlosgvv

June 21st, 2012
1:25 pm

Lil Barry Flameout – “Democrats choosing not to pay their mortgage”

Just when I think you can’t get any dumber, you do.

iggy

June 21st, 2012
1:25 pm

Dekalb Comments

June 21st, 2012
1:22 pm

Doesnt matter. When Bush was in office unemployment was at 5%, at which Nasty Pelousy was screeching. Now that Barry is in office unemployment has stayed above 8% for quite some time.

Let me refresh your memory. The Grand Poobah stated that his stimulus package would keep unemployment from rising to 8%.

Sorry, You Lose!

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
1:26 pm

So the tax cuts were passed in 2003, and unemployment dropped, and ranged from 4-6% for several years until Democrats stopped paying their mortgages. A couple of bad months of unemployment result, and it’s Our President Bush’s fault?

You realize that Obozo’s unemployment has been higher in every month of his regime than it was at any point during Our President Bush’s eight years, right?

Get a grip.

Uh oh

June 21st, 2012
1:30 pm

Yeah Barry

All those Democrats in Peachtree City, Cumming, Roswell, Alpharetta, etc………….

When you make that statement as you do often, never with any facts to back it up, it makes you look more asinine than you normally look.

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
1:37 pm

Romney’s draft deferments

You Cons just can’t face the facts. Romney marched in FAVOR of both the war and the draft….and then took three deferments.

He’s probably a hero in a Cons eyes.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
2:06 pm

It’s definitional. People who don’t pay their bills are Democrats.

iggy

June 21st, 2012
2:07 pm

Better than that lying Swift Boat Frankestein, John Kerry.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
2:08 pm

How many of our troops have been killed in Afghanistan on Chickenhawk Obozo’s watch?

Skip

June 21st, 2012
2:18 pm

Long ago LBB had some good stuff, wrong but good none the less. Now it’s just a broken record, get a new writer or give it a rest.

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
2:20 pm

People who don’t pay their bills are Democrats.

Facts and proof will be forthcoming I’m sure.

Look again at the map of which states are net users of federal funds – the worst are red states. The states that consume the most tax dollars are the states whose people whine the most about taxes being too high (Cons, again…..)

Rafe Hollister, suffering through Oblamer's ineptocracy

June 21st, 2012
2:20 pm

Finn, I have never heard of a pro war march. Where did they have those, gotta a picture of Romney marching?

iggy

June 21st, 2012
2:25 pm

“Look again at the map of which states are net users of federal funds – the worst are red states.”

I guess thats why the State of CA is virtually bankrupt.

“But, but, but”

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
2:28 pm

People who don’t pay their bills are Democrats.

Facts and proof will be forthcoming I’m sure.
——————–

Asking for such proof is nonsensical. It’s like asking someone to prove that the sky is blue. It just is what it is.

Rafe Hollister, suffering through Oblamer's ineptocracy

June 21st, 2012
2:29 pm

The states that consume the most tax dollars

Let’s see, that would be the states that have a large population of takers, or as lil Barry calls them, parasites. So, in your twisted logic, those people who vote for the smaller government GOP party, should change their vote to the Dems, so they can pay even more taxes to support even more takers, thereby easing some of the burden on the more productive states voters, who already vote Democrat.

I get your logic now, everybody votes Democrat and we can all live on the plantation drinking free Bubble Up and waiting on that Rainbow Stew.

Cutty

June 21st, 2012
2:30 pm

Kyle doesn’t think the Lilly Ledbetter Fair Pay Act was was a major legislative achievement. He thinks there were only two.

Texans have been voting for Rick Perry for Gov for almost 15 years. I wouldn’t out much into their logic or intelligence.

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
2:32 pm

Finn McCool (The System isn't Broken; It's Fixed)

June 21st, 2012
2:35 pm

thereby easing some of the burden on the more productive states voters

I guess you cons like that communist style better: take from the haves (blue states) to give to the have-nots (red states)?

mwuahahahahahaha

iggy

June 21st, 2012
2:35 pm

“Lilly Ledbetter Fair Pay Act” Oh yeah, you mean the “Socialistic Take Over of America Act”

iggy

June 21st, 2012
2:36 pm

Im in a red State and have plenty. I just dont want ObaManure taking and wasting anymore.

Lil' Barry Bailout (Unexpectedly Revised Downward)

June 21st, 2012
2:38 pm

Nice photo. Guess what words don’t appear on the protesters signs? War or Vietnam. Looks like a protest supporting the school president.

Lame, Finn.