Judge Dismisses Lawsuit Challenging Dodd-Frank, CFPB (Aug. 5, 2013)
Aug. 5, 2013
A federal judge has dismissed a lawsuit challenging the constitutionality of portions of the Dodd-Frank Act, including the formation of the Consumer Financial Protection Bureau (CFPB) and the appointment of its director, Richard Cordray.
U.S. District Judge Ellen Segal Huvelle last week determined that the claims in State National Bank of Big Spring, Texas, et al. v. Geithner, et al., “are not ripe for review” and granted the defendants’ motion to dismiss the lawsuit. Defendants, which include more than a dozen federal government officials and entities, filed a motion to dismiss the lawsuit last November.
“This is an unusual case, as plaintiffs have not faced any adverse rulings nor has agency action been directed at them. Most significantly, no enforcement action . . . has been taken against plaintiffs,” Huvelle wrote in her Aug. 1 ruling. The CFPB declined to comment on the judge’s ruling.
State National Bank of Big Spring, Texas, and the other plaintiffs, including 11 states, public policy organization Competitive Enterprise Institute and seniors advocacy group 60 Plus Association, are appealing the decision, according to reports.
“I am sure the constitutionality issues will be raised again by a party that is facing a CFPB enforcement action or investigation,” Terry Maher, partner at Baird Holm LLP, tells Paybefore.
At least two other lawsuits questioning the constitutionality of the CFPB or the appointment of Cordray are still in play. The U.S. Supreme Court in June agreed to hear National Labor Relations Board v. Noel Canning, and Kimberly Pisinski, a Connecticut-based attorney, last month filed a lawsuit against the CFPB claiming that the federal agency engaged in “abusive practices.”
