The lawsuit filed last June against the CFPB by a Texas bank, that alleged that the establishment of the CFPB was unconstitutional, the bases for which has been lambasted not only by the CFPB's hacks, but by some thoughtful commentators, is like a zombie that refuses to die no matter how much lead you pour into its body. It's not only surviving, it's gaining steam.
A client alert from Troutman Sanders discusses the fact that eight more states, Alabama, Georgia, Kansas, Montana, Nebraska, Ohio and West Virginia, have joined the lawsuit, joining Oklahoma, South Carolina and Michigan, which had previously joined the case. I'm sure Texas was motivated in part by the fact that Oklahoma had beaten it to the punch, and nothing galls Texas more than Oklahoma jeering at The Lone Star State from its rear view mirror.
Troutman Sanders posted excerpts of some of the public pronouncements by the attorneys general. Among those were the following:
- “Dodd-Frank is an alliance of big government and big business – Pennsylvania Avenue subsidizing Wall Street and suffocating Main Street,” Montana Attorney General Tim Fox said. “Montana’s community banks didn’t cause the 2008 financial crisis, but Dodd-Frank punishes them and our citizens who depend on them for credit to purchase a home, start a business or go to college. It cements the ‘too-big-to-fail’ approach and helps the biggest banks at the expense of consumers.”
- “The Dodd-Frank law is bad for banks, harmful to businesses and worse for consumers who want to borrow money,” said Texas Attorney General Greg Abbott. "It gives too much power to the federal government—and puts taxpayer dollars at risk."
- West Virginia Attorney General Patrick Morrisey said: “The Orderly Liquidation Authority allows un-elected Washington bureaucrats to pick winners and losers among affected creditors, entirely abandoning the rule of law."
- “Dodd-Frank was sold to the American people as a silver bullet to prevent another financial crisis and safeguard consumers,” said Georgia Attorney General Sam Olens. “In reality, it is a bureaucratic nightmare that puts Georgia taxpayers at risk and introduces more uncertainty into the economy. This is just another example of a power grab by the federal government attempting to dictate the operations of an entire industry.
- “Dodd-Frank shatters some of the most important rights we have in the marketplace and threatens our state’s and our citizens’ investments,” Oklahoma Attorney General Scott Pruitt said. “Our taxpayers could bear enormous burdens in making up for lost assets that were intended for retired state employees or to otherwise fund government services and infrastructure. The law puts at risk the pension contributions and tax dollars that the people have entrusted us to protect.”
I'm sure that big government fans in the trade press will continue to mock the plaintiffs and their supporters, as some of them did when the suit was initially filed, no matter how many states end up joining this lawsuit. Until banks and their trade groups wise up and stop paying subscription fees to publications that subtly, and not-so-subtly, undermine them, that is.
CFPB Delenda Est!