Posts Tagged ‘constitutionality’

Appeals Court Rules Challenge to CFPB’s Existence can Move Forward

July 27th, 2015 Comments off

consumer_financial_protection_bureausteve rhode slas get oug of debt org__kicks_aAccording to reuters, the U. S Court of Appeals for the District of Columbia Circuit has ruled the State National Bank of Big Spring, Texas has legal standing to challenge the constitutionality of the Consumer Financial Protection Bureau (CFPB) as well as the appointment of its director, Richard Cordray.

Being regulated by the CFPB gives the bank the right to challenge its very existence. Both challenges will be remanded back to a lower district court for consideration. While the CFPB was created by the Dodd-Frank Act to protect consumers from predatory lending involving the financial products distributed by banks, credit card companies, auto and payday lenders, many Republicans and others in the industry have objected to what they consider to be the regulatory overreach of the agency. Additionally, they are opposed to the single director, Richard Cordray, and the agency’s removal from Congressional oversight.

The court rejected a request by the bank to challenge the constitutionality of the Financial Stability Oversight Council, and in a separate ruling, rejected a group of state attorneys general request to challenge the constitutionality of Dodd-Frank’s orderly liquidation provisions. In both cases the court held neither held legal standing to challenge.

The bank’s CEO, Jim Purcell, said, “As a small community bank out in West Texas, we’ve always felt pretty vulnerable to the regulatory burdens imposed on us by Washington, D.C. In recent years, that threat was epitomized for us by the Consumer Financial Protection Bureau, an agency which was alarmingly free of traditional checks and balances.

As MHProNews knows, July 21 marked the fifth-year anniversary of the passage of the Dodd-Frank Act, which has had a deleterious effect on the financing of manufactured homes, one that the CFPB is not willing to alleviate. ##

(Image credit:Steve Rhode/

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily business News-MHProNews.


AGs from Eight States Join Suit

February 18th, 2013 Comments off

American Banker informs MHProNews eight additional state attorneys general have requested to join a lawsuit originally filed by a Texas community bank and two conservative organizations challenging the constitutionality of the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB). The suit focuses on the Orderly Liquidation Authority in Title II of Dodd-Frank, which permits the secretary of the Treasury to seize the assets of a financial institution without advanced warning. Texas Attorney General Greg Abbott says, “Under this law, unelected federal bureaucrats are empowered to unilaterally liquidate financial institutions in which the state invests taxpayer dollars. This unprecedented regime deprives the State of Texas of basic due process rights and places taxpayers’ resources at risk.” The lawsuit also challenges the structure of the CFPB, the president’s right to make a recess appointment to head the agency, and the authority of the Financial Stability Oversight Council. The attorneys general from Oklahoma, South Carolina and Michigan joined the case last Sept. The suit was originally filed in U.S. District Court for the District of Columbia in June, 2012. The defendants, essentially every federal financial regulator, have asked for dismissal of the case.

(Image credit: National Equity Fund)

Cordray Out the Doorway?

January 29th, 2013 Comments off

The MHI says the U. S. Court of Appeals for the District of Columbia district ruled the Obama administration did not have the authority to fill three recess appointments to the National Labor Relations Board (NLRB) Jan. 4, 2012. That was the same day President Obama made a recess appointment for Richard Cordray to be director of the Consumer Financial Protection Bureau (CFPB). The State National Bank of Big Spring (Tex.) has already filed suit challenging the constitutionality of Cordray’s appointment, which the NLRB ruling may strengthen. Since his recess appointment term expires at the end of 2013, President Obama nominated Cordray for confirmation again. Although he has been serving as director, if the legal challenge holds, his fate will be in the hands of Senate Republicans who have opposed his nomination because they want to change the CFPB’s structure. Meanwhile, Cordray gets high marks from David Stevens, president and CEO of the Mortgage Bankers Association. “He and his team are accessible, they’re open, they listen to all stakeholders clearly,” says Stevens. Tom Feltner, director of financial services for the Consumer Federation of America says, “The bureau has proven to be an effective regulator.” Republicans are not convinced. House Financial Services Committee Chairman Jeb Snarling (R-TX) says the NLRB ruling means Cordray’s appointment was unconstitutional, unlawful, or both. As MHProNews has learned, a separate lawsuit is challenging the Dodd-Frank financial reform law, including Cordray’s appointment.

(Photo credit: ABCNews)

Challenge to Corday’s Appointment Lacks Standing

November 28th, 2012 Comments off

A complaint filed last June by a Texas bank and two non-profit organizations challenged the validity of Richard Cordray’s recess appointment as head of the Consumer Financial Protection Bureau (CFPB) because the Senate was technically not in recess, according to HousingWire. The bank, State National, contends the CFPB’s Unfair, Deceptive and Abusive Acts or Practices (UDAAP) caused the bank to leave the mortgage lending business. The CFPB filed a motion to dismiss the case because the bank lacks standing, meaning State National cannot show sufficient connection to and harm from the appointment, nor does it have authority to challenge the constitutionality of a recess appointment. MHProNews has learned several governmental agencies, including the Treasury Department as well as the Securities and Exchange Commission, agree the bank and the other two organizations do not have standing.

(Image credit: CNNMoney)

Supreme Court Decision Angers Many

June 28th, 2012 Comments off

The decision by the U.S. Supreme Court this morning to uphold the individual mandate and the Patient Protection and Affordable Care Act (PPACA) went against the National Federation of Independent Business (NFIB) and 26 states in their argument before the Justices challenging the constitutionality of the measure. Yahoo!News reports Dan Danner, president of NFIB, says, “We are concerned about the precedent that this will set in Congress’ ability to mandate other aspects of our lives, but we will move forward from today to continue to fight, harder than ever, for real health-care reform for our membership. Under PPACA, small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses. The power and control of health-care decisions should be in the hands of the consumer, not the government.” Investors responded to the news by pulling back from the U.S. stock market, anticipating the rising costs will continue to forestall an economic recovery by causing the loss of jobs. Much of the business community has expressed similar sentiment. MHProNews has learned some 70 percent of the population oppose the measure. Both political parties will use the results for their purposes as they raise funds in the run-up to the Nov. 6 election.

(Photo credit: Wikiepdia Commons)

MHARR: Rep. Bachus, Lawsuit, Challenge Dodd-Frank

June 22nd, 2012 Comments off

The Oklahoma Manufactured Housing Association (OMHA) and the Manufactured Housing Association for Regulatory Reform (MHARR) reports House Financial Services Committee Chairman Spencer Bachus (R-Ala), in commenting on a lawsuit challenging the constitutionality of Dodd-Frank, says the Consumer Financial Protection Bureau (CFPB) is a massive governmental bureaucracy without adequate checks and balances, concentrating too much power in the hands of a single director who can spend his budget without oversight. MHARR points out the CFPB director has control over which financial products and services are available to consumers, currently crucial to the manufactured housing industry. Legislation co-sponsored by Rep. Bachus would: Establish a five-member commission to run the agency; create a review process to determine the affect of rules on financial institutions; and ensure the commission chair is Senate-confirmed. For MHARR’s full report, click here.

(Photo credit: realclearpolitics)

With New Director, CFPB May Emerge Swinging—or Not

January 10th, 2012 Comments off

With President Obama’s questioned recess appointment of Richard Cordray as head of the Consumer Financial Protection Bureau (CFPB), the agency can now implement the full authority of the Dodd-Frank Act, according to BusinessWeek. Dodd-Frank resulted from lawmakers complaining that regulators did not do enough to protect borrowers, and was passed over the objections of many Congressional Republicans. The agency began work July 21 but needed a director to officially supervise and regulate non-bank lenders. The largest banks—those with over $10 billion in assets– came under supervision July 21, and some are currently being examined. Initiatives are already in place to improve disclosure regarding mortgages, credit cards, and student loans, and the streamlining of mortgage applications has begun as mandated by Dodd-Frank. Formal rule-making to examine the activities of non-bank firms—an issue Cordray has named as top priority– will not begin until companies targeted for examination are specified, which may be a matter of months or perhaps  a year. However, former Republican Senate aide Mark Calabria tells in TownHall the so-called “recess appointment” of Cordray—since technically the Senate was not in recess— may be null and void because Dodd-Frank specifies the new director must be “confirmed by the Senate.” Otherwise, the authority remains with the Treasury Secretary and Cordray will not be able to police non-bank lenders, nor enforce those provisions of Dodd-Frank that negatively impact the MH industry. Calabria suggests Obama, a one-time constitutional law professor, is gambling on the constitutionality of his “recess appointment.” He also says there is a legality question in regulating non-bank finance, noting it was not the pay-day lenders and check cashers that led to the credit crisis in 2008; it was the Wall Street bankers, and they are exempt from the CFPB’s scope. In any event, manufactured housing industry lenders and those companies which do ‘buy here, pay here’ lending are cautioned by associations and experts to be prepared for the implementation of the new regulations.

(Photo credit:  bingimages)

Alabama Rolls Back Parts of Immigration Law

December 30th, 2011 Comments off

Following a story we reported here Dec. 13 regarding Alabama’s new immigration law, in light of a Federal judge’s injunction against enforcing certain provisions of the law, the Alabama Department of Revenue has altered its interpretation of HB 56, according to TheWetumpkaHerald. Section 30 prohibits illegal immigrants from conducting any “business transactions” with the state, which would preclude persons here illegally from either buying a permit for a manufactured house, or paying a fine if caught without a permit. According to a recent memo from the Department of Revenue, seven transactions, including manufactured housing registration with decals, and titles for manufactured homes, are no longer considered “business transactions” and will not require proof of citizenship. Proof of citizenship will still be required to obtain motor vehicle registration and a driver’s license. A case challenging the constitutionality of the law has been brought by the Southern Poverty Law Center on behalf of two Mexican men without proof of citizenship. has learned that case will be heard in 2012.

(Graphic credit: state of Alabama)