Someone had to take on the CFPB, the Goldman Sachs of regulatory agencies, the great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like it might be a viable bank. Who better than a bank from the only state that was once an independent nation? No, I'm not talking about Hawaii, I'm talking about the Lone Star State.
A Texas community bank is leading a lawsuit against the Consumer Financial Protection Bureau.
The State National Bank of Big Spring will file a lawsuit Thursday afternoon in the U.S. District Court for the District of Columbia. The suit will challenge certain provisions in the Dodd-Frank Act as unconstitutional, with a focus on the creation of the CFPB. The Competitive Enterprise Institute and the 60 Plus Association will also join the case.
The parties complained in a press release Thursday that there are "no checks and balances" in certain provisions of Dodd-Frank, while taking issue with the "unrestrained power" that the government gives to the CFPB.
"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," Jim Purcell, State National Bank's chief executive, said in the release. "Dodd-Frank effectively gives unlimited regulatory power to this so-called Consumer Financial Protection Board ... with a director who is not accountable to Congress, the President or the Courts. That is simply unconstitutional."
The plaintiffs are specifically targeting Title I and Title X in Dodd-Frank, which formed new agencies to monitor systemically important enterprises and created the CFPB.
The plaintiffs are represented by C. Boyden Gray, former White House counsel, which appears to demonstrate that the people behind this lawsuit are not paupers. It also demonstrates that this isn't a lone Texas community bank drawing a line in the sand. Still, there's something appealing about the front man for this group being a Gus McCrae-type Texan standing in the middle of a Big Spring street, spitting a load of chawed-up Redman on Recess Richie's patent leather wingtips, and drawling "That dog won't hunt, Hoss."
American Banker reporter Rachel Witkowski correctly observes that "[i]t was widely assumed that lawsuits would be filed against the CFPB immediately after Richard Cordray was appointed the director in January. But so far, very few lawsuits have been filed, nor have they been as broad as State National Banks's allegations."
It takes a certain amount of daredeviltry to be the first horse out of the chute in this race. Texans, however, have a history of living on the fine edge between daring and recklessness, so it shouldn't come as a surprise that the lead plaintiff is located in a part of the state where wildcatters have sunk as many dry holes as gushers.
The CFPB turned up its aristocratic nose at the rubes who filed this action.
"This lawsuit appears to dredge up old arguments that have already been discredited," said Jen Howard, a CFPB spokeswoman. "We're going to keep our focus on the important work Congress created us to do — making markets work for consumers and responsible providers."
"Discredited" by whose Supreme Court? You keep focusing on "the important work," Jen. Keep your eyes firmly fixed on the stars above right up until the instant a herd of stampeding longhorns plows you under the sod.
Hubris: it's not just for Greeks.
CFPB delenda est!