CFPB Files Motion to Dismiss Lawsuit Over Agency Leadership

The Consumer Financial Protection Bureau (CFPB) has filed a motion to dismiss the case currently challenging President Obama’s recess appointment of Director Richard Cordray, citing plaintiffs’ lack of standing in a report from the CFPB.

This decision comes five months after complaints filed by State National Bank of Big Spring, Texas along with two nonprofits—60 Plus Association and Competitive Enterprise Institute—claiming President Obama’s January appointment of current CFPB Director Cordray was unconstitutional.

The CFPB filed its motion with other named defendants, who included the Treasury Department, the other federal banking agencies and the U.S. Securities Exchange Commission.

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In June, State National Bank filed suit against the CFPB, claiming that the CFPB Unfair, Deceptive and Abusive Acts or practices caused it to exit the mortgage lending business. 

These defendants filed their claims for dismissal on the basis that neither State National Bank, nor the other plaintiffs have showed “any injury sufficient to give them standing to challenge the CFPB’s constitutionality or Director Cordray’s appointment,” according to Ballard Spahr LLP. 

Written by Jason Oliva

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  • This move should help speed the day of clarity for the bureau.  This hurdle hardly seems worth its cost.  There is little hope of any significant change to Dodd-Frank before 2017.  Unless the Republicans gain a stranglehold on all of Congress in 2015 due to the 2014 elections, our President will just exercise his veto power on any legislative intended to change Dodd-Frank unless it is tied to other legislation he somehow needs to solidify his legacy.  If the Democrats regain the House and can get to over 59 votes in the Senate in 2015, Dodd-Frank could be but the first stone in even greater regulation of the financial services industries.

    How will Congress react to the mess at FHA?  Will Democrats let alone Republicans stand still for the legislative requests being made by HUD?  In this climate of the fiscal cliff and growing deficits, will HUD get its way?

    Well, one is certain; for now and at least the next two years, the CFPB is here to stay.  The CFPB may be with us for decades to come if not longer.

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