Feds in filing: Eight states joining Dodd-Frank challenge lack standing

WASHINGTON (Legal Newsline) -- The federal government is claiming the eight state attorneys general that last week joined a lawsuit challenging the constitutionality of certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act lack the standing to do so.

In a brief response to the plaintiffs' motion for leave to file second amended complaint filed in the U.S. District Court for the District of Columbia Friday, the government said in its view the eight additional states that are attempting to join the suit "lack standing to assert their challenges and their claims are unripe."

However, the government wrote in its five-page filing that "in the interest of expeditiously resolving" the litigation, it would not oppose the motion for leave to file a second amended complaint.

The eight states joining the lawsuit Wednesday were West Virginia, Montana, Texas, Georgia, Alabama, Kansas, Nebraska and Ohio.

In October, South Carolina, Oklahoma and Michigan joined the suit, which was originally filed in June by the State National Bank of Big Spring in Texas, the 60 Plus Association and the Competitive Enterprise Institute.

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.

The suit also 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.

CEI attorney Hans Bader has said Cordray's role "is like a czar."

"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 said in June.

However, Cordray's employment could soon become a question following a court ruling that invalidated appointments made by President Barack Obama to the National Labor Relations Board.

Obama characterized them as recess appointments, but Republicans claimed they were holding sessions. Cordray was appointed at the same time.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.