AGs of S.C., Okla. and Mich. join challenge of Dodd-Frank
WASHINGTON (Legal Newsline) - Three state attorneys general have joined the lawsuit challenging the constitutionality of provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Alan Wilson of South Carolina, Scott Pruitt of Oklahoma and Bill Schuette of Michigan were added as plaintiffs to the lawsuit on Sept. 20. The State National Bank of Big Spring in Texas, the 60 Plus Association and the Competitive Enterprise Institute filed the original complaint in June.
The plaintiffs allege there are no effective checks and balances in the law. Dodd-Frank was signed into law in July 2010 and aimed to regulate the financial industry.
"Dodd-Frank is to the financial sector what the Affordable Care Act is to the health care industry," Wilson said.
"It increases the size and power of the government in Washington at the expense of the states, our taxpayers and the Constitution. It seeks to replace the rule of law with the rule of politics."
The suit challenges the constitutionality of the Consumer Financial Protection Bureau, which was created by the law and is headed by former Ohio Attorney General Richard Cordray.
"Its director is like a czar," CEI attorney Hans Bader said. "He is not accountable to anyone and can't be fired even if voters elect a president with different ideas about how to protect consumers."
Bader says a 1926 U.S. Supreme Court decision allows a president to fire department heads at will and the CFPB, unlike independent commissions, is covered by the rule because it is a single-leader agency not subject to collegial oversight.
"Unlike the Chairman of an independent agency like the SEC, who can be outvoted by fellow commissioners if he oversteps his authority, the CFPB's director is accountable to no one," Bader said.
"He is not accountable to the democratically-elected President, unlike cabinet secretaries, who can be removed at will by the President. If the CFPB's sole director can be given immunity from removal, so, too, could cabinet secretaries, who could be given life tenure, enabling them to thwart the very changes that a newly-elected President was elected to carry out."
CEI also says judicial review of the bureau's actions is limited because the Dodd-Frank law requires courts to give extra deference to the bureau's legal interpretations.
Other gripes with the bureau include funding that comes from the Federal Reserve and not Congress, resulting in approximately $400 million that Congress can't regulate; and unelected bureaucrats wielding "unrestrained power" over the lives of U.S. citizens without public accountability.
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