The constitutionality of the 2010 Dodd-Frank financial reform law is being questioned by the attorney generals of at least 11 U.S. states, according to various news sources. At the heart of the lawsuit, which was filed in the District of Columbia in U.S. District Court and named the Consumer Financial Protection Bureau and the Treasury Department as defendants, is the contention that the government gave itself unnecessary levels of authority over the nation’s private financial industry.
In the most recent filing, which was originally submitted during September 2012, prosecutors argued that the Treasury Secretary has unilateral authority to dissolve banks and other related institutions with little warning. This creates an issue for investors and shareholders who would have little warning before the company they hold stock in would be forced into bankruptcy, potentially wiping out their positions and creating millions of dollars in losses.
On February 13, Texas joined states like Michigan, Ohio, Alabama and Kansas in the lawsuit. The Lone Star State’s attorney general, Greg Abbott, stated that he felt compelled to prove the unconstitutionality of this new level of oversight over American finance firms.
“The Dodd-Frank law is bad for banks, harmful to businesses and worse for consumers who want to borrow money. It gives too much power to the federal government – and puts taxpayer dollars at risk,” Abbott said in a press statement. “Under this law, unelected federal bureaucrats can unilaterally liquidate financial institutions in which the state invests taxpayer dollars. The State of Texas could be denied basic due process rights and taxpayers’ dollars could recklessly be put at risk.”
While it’s unclear how this case will proceed – it could reach the U.S. Supreme Court before it’s resolved – the lawsuit may have profound implications for American investors. Because of this, those with a stake in the market need to undertake wealth preservation activities in order to protect their hard-earned money. To learn more, visit GreatWealthStrategies.com today.