A community bank in Texas is seeking to take its six-year legal challenge of the constitutionality of the Consumer Financial Protection Bureau to the nation’s highest court.
State National Bank of Big Spring, Texas, is collaboration with the nonprofit Competitive Enterprise Institute (CEI) and the seniors’ advocacy group 60 Plus Association, filed a petition with the U.S. Supreme Court to hear a lawsuit that would declare the CFPB’s organizational structure unconstitutional. State National Bank first tried to void the CFPB’s structure in court in 2012, but its case was dismissed on year later. The U.S. Court of Appeals overturned that decision in 2015. However, the case has been in limbo since 2016, when the Court of Appeals opted to hear PHH’s similar case against the CFPB instead of the bank’s case.
John Berlau, a senior fellow at the CEI, noted
that while his organization welcomed the changes in the CFPB’s focus following Richard Cordray’s departure as director and supports Kathy Kraninger’s nomination to become the next CFPB director, the problem with the agency is the design of its leadership structure.
“We still believe that Kraninger—or any other sole director of the bureau—must operate within constitutional constraints,” he stated. “These include the ability to be checked by presidential removal and by the congressional appropriations process. Currently the bureau receives funding automatically from the Federal Reserve, depriving Congress of the opportunity to exercise meaningful oversight through the budget process. That is why we our pressing on with this important lawsuit.”