Sept 21 Three U.S. states have joined a lawsuit
against federal regulators, challenging the constitutionality of
the 2010 Dodd-Frank law that overhauled U.S. financial oversight
and created the Consumer Financial Protection Bureau.
The attorneys general of Michigan, Oklahoma and South
Carolina are challenging a portion of Dodd-Frank that empowers
the Treasury secretary to order the liquidation of failing
financial institutions, according to a complaint filed in U.S.
District Court for the District of Columbia on Thursday.
The states joined a suit filed in June by conservative think
tank Competitive Enterprise Institute, a Texas bank and a senior
The groups claimed the consumer protection agency and the
Financial Stability Oversight Council, which addresses risks to
the overall U.S. financial system, are unconstitutional because
they are not subject to sufficient checks by other branches of
The complaint filed Thursday was amended to include the
states' challenge against the new liquidation authority. The
states did not sign on to the challenges against the consumer
protection bureau and the oversight council.
Treasury Department spokeswoman Suzanne Elio said the
department would fight attempts to impede financial regulation.
"This lawsuit just rehashes old arguments of those who
oppose Wall Street reform," Elio said. "Independent regulatory
agencies have long been part of our regulatory framework, and
the Supreme Court has concluded that they are constitutional."
Dodd-Frank, passed by Congress in response to the 2007-2009
U.S. financial crisis, gives regulators broad authority to
oversee financial institutions.
It has since drawn criticism from Republicans and industry
groups who say new regulations could hurt businesses and
The attorneys general from the three states are all