The ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) faces a new legal challenge as a Texas community bank and two conservative groups launch a lawsuit to undo it and the financial reform law that created it two years ago.[IMAGE]
The Big Spring, Texas-based ""State National Bank"":https://www.statenb.com/ recently paired with the ""Competitive Enterprise Institute"":http://cei.org/ and ""60 Plus Association"":http://www.60plus.org/ to sue the embattled consumer bureau in federal court.
The ""suit"":http://cei.org/sites/default/files/SNB%20v%20Geithner%20-%20Complaint.PDF challenges the constitutionality of the CFPB and Dodd-Frank Act, as well as President ""Barack Obama's"":http://www.whitehouse.gov/administration/president-obama decision to recess-appoint CFPB Director Richard Cordray in January.
Jim Purcell, CEO of State National Bank, did not immediately return requests for comment to _MReport_.
""_The Hill_"":http://thehill.com/blogs/on-the-money/banking-financial-institutions/234095-texas-bank-challenging-dodd-frank-consumer-bureau-in-court quoted Purcell as saying that ""[n]o 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.""[COLUMN_BREAK]
The suit cites ""harm"" done to State National Bank by Dodd-Frank, with claims that uncertainty facilitated by the reform law forced the financial institution to stop making mortgage loans for homeowners.
C. Boyden Gray, a former White House general counsel, will represent the plaintiffs in their suit.
The consumer bureau seemed to dismiss the suit.
""This lawsuit appears to dredge up old arguments that have already been discredited,"" Jennifer Howard, CFPB spokesperson, said in an e-mail to sister publication _MReport_. ""We're going to keep our focus on the important work Congress created us to do Ã¢â‚¬" making markets work for consumers and responsible providers.""
Rep. ""Spencer Bachus"":http://bachus.house.gov/ (R-Alabama) issued a statement in support of structural reform efforts aimed at the consumer bureau.
""There is no question the Consumer Financial Protection Bureau Ã¢â‚¬" by the design of Dodd-Frank Act supporters Ã¢â‚¬" lacks accountability and transparency,"" he said. ""As it is currently structured, the CFPB is one of the most powerful and least accountable agencies in all of Washington.""
The suit names Cordray, Treasury Secretary Timothy Geithner, and Federal Reserve Chairman Ben Bernanke, among others, including the ""Federal Stability Oversight Council"":http://www.treasury.gov/initiatives/fsoc/Pages/default.aspx (FSOC).
Beyond claims against the constitutionality of the CFPB and Dodd-Frank, the suit charges that the FSOC will disadvantage smaller financial institutions by conferring special status on larger banks that it declares systemically important to the global financial system.
""Taken together, these provisions provide the FSOC virtually boundless discretion in making its highly consequential designations, a violation of the separation of powers,"" the suit said.