Reversing a lower court decision, a three-judge panel of the D.C. Circuit Court of Appeals allowed key parts of a constitutional challenge to certain provisions of the Dodd-Frank Act to proceed. The appellate court held that State National Bank, Big Spring, Texas, has standing to challenge the constitutionality of the CFPB and President Obama’s original recess appointment of CFPB Director Richard Cordray and that both of these claims are "ripe" for being heard.
The court upheld the district court’s determination that State National Bank does not have standing to challenge the constitutionality of the FSOC, which does not oversee or regulate it. The court also affirmed the lower court’s determination that a group of 11 states that joined the lawsuit do not have standing to challenge the “orderly liquidation authority” granted to regulators by the Dodd-Frank Act and that their claim is not ripe.
With Friday's decision, the claims for which State National Bank has standing may now return to the lower court for further proceedings.
Read the opinion.