Court Dismisses Big Springs Bank’s Constitutional Challenge to CFPB

by Deepak Gupta

As some of us predicted on the day it was filed, Judge Ellen Huvelle of the U.S. District Court in Washington has just dismissed for lack of standing an ideologically-motivated constitutional challenge to the Consumer Financial Protection Bureau's structure and authority, including a challenge to Rich Cordray's recess appointment.

The case was originally brought by the State National Bank of Big Springs, Texas, represented by former White House Counsel C. Boyden Gray, and the Competitive Enterprise Institute. It was later joined by the States of Alabama, Georgia, Kansas, Michigan, Montana, Nebraska, Ohio,
Oklahoma, South Carolina, Texas, and West Virginia, which challenged only the Dodd-Frank Act's orderly liquidation authority under Title I and II, not the CFPB's structure under Title IX.  

The court's 62-page opinion explains what should have been apparent all along: that the plaintiffs were all without standing.  None of the plaintiffs are even subject to regulation under Title I and II and the bank's attempts to establish standing on the basis of the potential impact of regulation under Title IX was far too speculative. 

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