WASHINGTON — A
federal appeals court on Friday revived a legal challenge to the
Consumer Financial Protection Bureau, the federal office created
to protect consumers in financial dealings with banks, lenders and
credit card companies.
appeals court in Washington ruled that a Texas bank could
challenge the constitutionality of the watchdog agency's powers
even though the bank's conduct has not been subject to any
district judge had dismissed the lawsuit in 2013 after finding the
bank had no legal standing to bring the claims.
agency was created in 2010 by a sweeping law that overhauled
financial regulations following the 2008 financial crisis. Wall
Street interests and Republicans in Congress fiercely opposed the
The appeals court
sent the case back to the lower court to consider the challenges.
Eleven states had
joined the lawsuit filed by State National Bank of Big Spring,
Texas, to argue that Congress delegated too much power to the
bureau. They also argue that it should not be headed by just one
person and that President Barack Obama illegally appointed the
agency's director, Richard Cordray, during a congressional recess.
Cordray was later confirmed by the Senate.
panel of the appeals court said those arguments could proceed.
Judge Brett Kavanaugh said the bank did not have to intentionally
violate the law in order to launch a constitutional challenge.
said the bank could not challenge the constitutionality of the
Financial Stability Oversight Council, created by the financial
overhaul law to designate certain financial companies deemed
"too big to fail" for additional regulatory oversight.
The court also
rejected the bank's challenge to part of the law that allows the
Treasury secretary to order liquidation of a failing financial
company that poses a risk to the financial stability of the U.S.
has argued that the bureau's structure and powers are