Lawsuit challenging CFPB's constitutionality can go forward, says appeals court

by Ryan Smith27 Jul 2015
The Consumer Financial Protection Bureau shouldn’t even exist, according to a lawsuit challenging the agency’s constitutionality.

The U.S. Court of Appeals ruled Friday that a lawsuit challenging the CFPB’s constitutionality could move forward, according to a Wall Street Journal report. The decision reverses a trial judge’s 2013 ruling throwing out the lawsuit.

The lawsuit, filed by the State National Bank of Big Spring, a small bank in West Texas, contends that the CFPB’s formation and operation under the Dodd-Frank Act may unconstitutionally violate the separation of government powers, since the agency has broad authority virtually unchecked by other agencies.

The appeals court recommended that a trial court consider the issues of constitutionality raised in the suit, the Journal reported.

Among the plaintiffs joining the bank in its suit is the libertarian Competitive Enterprise Institute, which has unsuccessfully challenged Obamacare in recent years.
 

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