Three states have joined a lawsuit challenging the constitutionality of the Dodd-Frank Act, complaining that it gives the government too much power to take over and liquidate nonbank companies whose failure would jeopardize the financial system, the Legal Times reported on Friday. The states of Michigan, Oklahoma and South Carolina joined a broader suit attacking Dodd-Frank that was filed in June in U.S. District Court for the District of Columbia by a Texas community bank, the Competitive Enterprise Institute and the 60 Plus Association. The original suit focused in large part on the Consumer Financial Protection Bureau, complaining that it "aggregates the power of all three branches of government in one unelected, unsupervised and unaccountable bureaucrat," as former White House counsel C. Boyden Gray, founder of Boyden Gray & Associates in Washington, said when the suit was filed. The three states, however, specifically declined to go after Dodd-Frank on those grounds. Instead, the states are asking the court to review the constitutionality of the Orderly Liquidation Authority, established under Title II of Dodd-Frank.
