WASHINGTON (8/5/13)--A district court judge last week dismissed a case that challenged the constitutionality of the Consumer Financial Protection Bureau and the Financial Stability Oversight Council and sought to overturn the appointment of CFPB Director Richard Corday.
U.S. District Court for the District of Columbia Judge Ellen Segal Huvelle said the defendants did not suffer an injury that is "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." Further, she wrote, and injury that did occur could not be traced directly to the defendants.
"A decision along these lines was predicted by many observers and does not come as any surprise. But this is one more indication that the CFPB will be with us for the foreseeable future," Credit Union National Association General Counsel Eric Richard said.
The suit was filed by State National Bank of Big Spring (Texas), the 60 Plus Association, and Competitive Enterprise Institute last year in federal court in Washington, D.C. Alabama, Georgia, Kansas, Michigan, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas, and West Virginia also joined the plaintiffs suit.
National Credit Union Administration Chair Debbie Matz and Cordray were among nine federal officials named as suit co-defendants because the officials are members of the FSOC. The case did not seek to challenge NCUA separately.
The bank argued that it was injured because it has incurred compliance costs in connection with the CFPB's mortgage servicing rule, because it has exited the market for issuing new mortgages due to the qualified mortgage rule and general uncertainty around the mortgage marketplace, and because it has exited the market for remittance transfers due to the CFPB's remittance rule.
The bank noted that its compliance costs included staff time and spending approximately $10,000 to join a bank "Compliance Alliance" to keep up with CFPB actions and developments in the regulatory landscape.