Three states have joined a lawsuit challenging the constitutionality
of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
On Sept. 20, South Carolina, Michigan, and Oklahoma joined a lawsuit challenging the legality of the financial reform act. Their complaint argues that the “Orderly Liquidation Authority” granted to the Treasury Secretary under Title II of the act “violates the separation of powers.”
In a conference call with reporters on Friday, Scott Pruitt, Oklahoma’s attorney general, said legislators used the 2008 financial crisis “to concentrate power in Washington, DC.”
He argued that the bill is incompatible with the U.S. constitutional system and its framework of checks and balances.
The lawsuit, he said, is about the “fundamental concept of making sure that our Constitutional framework is upheld.”
The act gives the treasury secretary the power to liquidate financial institutions “with little or no advance warning, under cover of mandatory secrecy, and without either useful statutory guidance or meaningful legislative, executive, or judicial oversight,” the filed complaint states.
Each state has pension funds in institutions regulated by the act, the complaint states, which are exposed to harm if the treasury secretary liquidates a bank. Each state is “ultimately liable” for the pension funds, so if the pension funds lose value because of actions permitted under Title II, the states could be forced to absorb the losses.
The states also argue that Title II violates the Due Process clause of the Fifth Amendment and the requirement in Article One of the Constitution that bankruptcy laws be “uniform.”
Read more: http://freebeacon.com/dodd-franks-day-in-court/
On Sept. 20, South Carolina, Michigan, and Oklahoma joined a lawsuit challenging the legality of the financial reform act. Their complaint argues that the “Orderly Liquidation Authority” granted to the Treasury Secretary under Title II of the act “violates the separation of powers.”
In a conference call with reporters on Friday, Scott Pruitt, Oklahoma’s attorney general, said legislators used the 2008 financial crisis “to concentrate power in Washington, DC.”
He argued that the bill is incompatible with the U.S. constitutional system and its framework of checks and balances.
The lawsuit, he said, is about the “fundamental concept of making sure that our Constitutional framework is upheld.”
The act gives the treasury secretary the power to liquidate financial institutions “with little or no advance warning, under cover of mandatory secrecy, and without either useful statutory guidance or meaningful legislative, executive, or judicial oversight,” the filed complaint states.
Each state has pension funds in institutions regulated by the act, the complaint states, which are exposed to harm if the treasury secretary liquidates a bank. Each state is “ultimately liable” for the pension funds, so if the pension funds lose value because of actions permitted under Title II, the states could be forced to absorb the losses.
The states also argue that Title II violates the Due Process clause of the Fifth Amendment and the requirement in Article One of the Constitution that bankruptcy laws be “uniform.”
Read more: http://freebeacon.com/dodd-franks-day-in-court/
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