WASHINGTON A federal judge today dismissed a lawsuit challenging the constitutionality of the Dodd-Frank Act, ruling the Texas bank that brought the suit and 11 states’ attorneys general who signed on did not show the likelihood of harm from the new law.
The suit, originally filed by State National Bank of Big Spring, Texas, targeted the Consumer Financial Protection Bureau that was created under Dodd-Frank, claiming the new agency was given too broad powers and that its director, Richard Cordray, was seated unconstitutionally as a recess appointment. The controversy over Cordray was resolved last month when the Senate finally voted to confirm his nomination.
In dismissing the suit, U.S. Judge Ellen Huvelle said the plaintiffs "have not faced any adverse rulings" under Dodd-Frank and so they did not have standing to challenge the law and their claims were not ready for review.
Joining the Texas bank in its challenge were conservative advocacy groups 60 Plus Assn., and the Competitive Enterprise Institute, a Washington public policy group, and the attorneys general of 11 states, including Georgia, Michigan, Ohio and Texas.
They said the government's new power to liquidate large, non-bank financial companies that are on the brink of failure was unconstitutional and threatened to impose unequal treatment of state pension fund investments.
The State National Bank of Big Spring had argued it already has been harmed by new consumer bureau regulations requiring the disclosure of fees for remittances sent to foreign countries and faced harm from pending rules on mortgages.
But the Judge said the bank did not demonstrate it was financially harmed or faced imminent harm from the bureau's rules.
