A Texas community bank represented by former White House Counsel C. Boyden Gray is challenging the constitutionality of the 2010 financial reform law.
The suit is being filed in U.S. District Court in Washington, D.C. Thursday. The bank argues that the Consumer Financial Protection Bureau (CFPB) established by the Dodd-Frank law ignores the Constitution’s requirement for checks and balances.
The CFPB is "simply unconstitutional," says Jim Purcell, CEO of State National Bank in Big Spring, Texas, according to The Hill
“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,” Purcell says.
“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."
The presence of Gray, who served President George H.W. Bush, gives added weight to the suit. "As a whole, Dodd-Frank aggregates the power of all three branches of government in one unelected, unsupervised and unaccountable bureaucrat," the renowned lawyer says.
The suit doesn’t come out of the blue. Many experts anticipated legal fights against the CFPB after President Barack Obama installed its director, Richard Cordray, through a recess appointment in January. Obama’s action followed Republicans’ rejection of the nomination in Congress.
Many Republicans are concerned about the CFPB’s lack of accountability. They have offered bills to put Congress in charge of its funding rather than the Federal Reserve and to replace the director position with a bipartisan board of directors.
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