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State AGs join lawsuit challenging constitutionality of CFPB

Posted in CFPB General

Republican state Attorneys General from Oklahoma, South Carolina and Michigan have now joined the lawsuit that was filed this past June in federal court in Washington, D.C. challenging the constitutionality of Dodd-Frank.  (Contrary to initial reports, the Kansas AG did not join the suit.)  The original plaintiffs in that lawsuit were State National Bank of Big Spring, Texas and two non-profit organizations in the metropolitan Washington, D.C. area.  On September 20, an amended complaint was filed in the case adding the three state AGs as plaintiffs.  

Surprisingly, the state AGs did not join the portions of the complaint seeking an order declaring unconstitutional  the provisions of Dodd-Frank creating the CFPB as well as the recess appointment of Richard Cordray as CFPB Director. Instead, the amended complaint added a challenge to the provisions in Title II of Dodd-Frank that give the Treasury Secretary “orderly liquidation authority” over financial companies and, in the amended complaint’s prayer for relief, the state AGs are only parties to the request for an order declaring unconstitutional the Title II provisions.