Bloomberg News reports that the attorneys general of Michigan, Oklahoma and South Carolina have joined a lawsuit filed in June by State National Bank of Big Spring, Texas, and two conservative advocacy groups. The states, in their amended complaint attached to the lawsuit, are only questioning the Dodd-Frank provision that empowers the U.S. Department of the Treasury to order a liquidation of a failing financial company that has the potential to bring down the U.S. banking system.
‘Dodd-Frank empowers un-elected federal bureaucrats to pick winners and losers, liquidate entire companies, and decide which contracts are kept and which are broken, without congressional oversight or proper judicial review,’ says South Carolina Attorney General Alan Wilson (pictured left). ‘If a large financial institution fails [while] holding state pension contributions and tax dollars, the states have very little ability to recover their citizens' assets.’
However, the attorneys general are abstaining from involvement in another portion of the lawsuit, which questions the constitutionality of the Consumer Financial Protection Bureau and the legal status of its director, Richard Cordray, who was put in office on Jan. 4 in a controversial recess appointment by President Obama.