WASHINGTON (Reuters) – A group including a Texas bank and 11 state attorneys general that seeks to overturn parts of the Dodd-Frank financial law announced on Friday that it would appeal a U.S. judge’s decision to dismiss the challenge.
On Thursday, Judge Ellen Huvelle of the U.S. District Court for the District of Columbia dismissed the lawsuit by the State National Bank of Big Spring, Texas, the attorneys general, the Competitive Enterprise Institute and the 60 Plus Association.
Huvelle said the group could not show that they had suffered injury as a result of the 2010 financial reform law.
“The district court’s opinion is deeply flawed,” C. Boyden Gray, lead counsel for the plaintiffs, said in a statement announcing the appeal.
“It is disturbing that the opinion – and the government – ignored the very real harm Dodd-Frank has inflicted on” the Texas bank, Gray said.
The bank argues that the new Consumer Financial Protection Bureau, which was created by Dodd-Frank and opened in 2011, is unconstitutional because Congress and the president lack sufficient checks on its power.
The group also challenges a new council of regulators known as the Financial Stability Oversight Council, which is charged with identifying firms that could destabilize the financial system if they failed. Those firms are then subject to tougher regulation.
The plaintiffs said “systemically important” banks would get implicit government backing, which would in turn raise borrowing costs for smaller banks.
Dodd-Frank also allows regulators to wind down giant failed banks in an emergency. The states said pension funds that are creditors of those banks might be treated unfairly if regulators used this ‘orderly liquidation authority’ rather than letting failed firms go through bankruptcy.
Huvelle said in her opinion on Thursday that since none of the plaintiffs had faced enforcement actions or other agency action as a result of the provisions, they could not show they had been harmed by the law.
The plaintiffs’ lawsuit was filed on Friday in the U.S. Court of Appeals for the District of Columbia Circuit.
(Reporting by Emily Stephenson; Editing by James Dalgleish)
Source: http://news.yahoo.com/states-texas-bank-file-appeal-dodd-frank-law-213315351.html
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