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State National Bank of Big Spring v. Lew

United States District Court, District Circuit

August 1, 2013

JACOB J. LEW et al., [1] Defendants.


ELLEN SEGAL HUVELLE, United States District Judge

Plaintiffs State National Bank of Big Spring (“SNB” or the “Bank”), the 60 Plus Association (“60 Plus”), the Competitive Enterprise Institute (“CEI”) (collectively the “Private Plaintiffs”), and the States of Alabama, Georgia, Kansas, Michigan, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Texas, and West Virginia (collectively “the States”) have sued to challenge the constitutionality of Titles I, II, and X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203 (July 21, 2010) (the “Dodd-Frank Act”), as well as the constitutionality of Richard Cordray’s appointment as director of the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”).[2] (See generally Second Amended Complaint [ECF No. 24] (“Second Am. Compl.”).) Defendants, who include more than a dozen federal government officials and entities, have filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) on the grounds that plaintiffs lack Article III standing, or, in the alternative, that their claims are not ripe for review. For the reasons stated below, the Court will grant defendants’ motion.


On July 21, 2010, Congress enacted the Dodd-Frank Act as “a direct and comprehensive response to the financial crisis that nearly crippled the U.S. economy beginning in 2008.” S. Rep. No. 111-176, at 2 (2010). The purpose of the Act was to “promote the financial stability of the United States . . . through multiple measures designed to improve accountability, resiliency, and transparency in the financial system[.] ” Id. Those measures included “establishing an early warning system to detect and address emerging threats to financial stability and the economy, enhancing consumer and investor protections, strengthening the supervision of large complex financial organizations and providing a mechanism to liquidate such companies should they fail without any losses to the taxpayer, and regulating the massive over-the-counter derivatives market.” Id. The Act “creat[ed] several new governmental entities, [] eliminate[ed] others, and [] transferr[ed] regulatory authority among the agencies.” (See Defendants’ Motion to Dismiss [ECF No. 26-1] (“Def. Mot.”) at 6.)

In this suit, plaintiffs challenge Title I of Dodd-Frank, which established the Financial Stability Oversight Council (“FSOC” or the “Council”), see 12 U.S.C. § 5321; Title II, which established the Orderly Liquidation Authority (“OLA”), see 12 U.S.C. § 5384; and Title X, which established the CFPB. See 12 U.S.C. §§ 5491, 5511.[3] Specifically, in Count III, the Private Plaintiffs challenge the constitutionality of Title I on separation-of-powers grounds, alleging that the FSOC “has sweeping and unprecedented discretion to choose which nonbank financial companies to designate as ‘systematically important’” and that such “powers and discretion are not limited by any meaningful statutory directives.” (Second Am. Compl. ¶ 8.) In Count I, the Private Plaintiffs challenge Title X on the grounds that it violates the separation of powers by “delegat[ing] effectively unbounded power to the CFPB, and coupl[ing] that power with provisions insulating the CFPB against meaningful checks by the Legislative, Executive, and Judicial Branches[.]” (Id. ¶ 6.) And, in Count II, the Private Plaintiffs challenge the appointment of Richard Cordray as CFPB Director as unconstitutional on the grounds that he was appointed without the Senate’s advice and consent in violation of the Appointments Clause of the United States Constitution. U.S. Const. art. II, § 2, cl. 2. (See Second Am. Compl. ¶ 7.)[4]

All plaintiffs challenge Title II on three separate grounds. In Count IV, they allege that Title II violates the separation of powers because it “empowers the Treasury Secretary to order the liquidation of a financial company with little or no advance warning, under cover of mandatory secrecy, and without either useful statutory guidance or meaningful legislative, executive, or judicial oversight.” (Second Am. Compl. ¶ 9.) In Count V, they allege that Title II violates the due process clause of the Fifth Amendment, because the “[t]he forced liquidation of a company with little or no advance warning, in combination with the FDIC’s virtually unlimited power to choose favorites among similarly situated creditors in implementing the liquidation, denies the subject company and its creditors constitutionally required notice and a meaningful opportunity to be heard before their property is taken – and likely becomes unrecoverable[.]” (Id. ¶ 10.) And, in Count VI, they allege that Title II violates the constitutional requirement of uniformity in bankruptcy because “[w]ith no meaningful limits on the discretion conferred on the Treasury Secretary or on the FDIC, Title II not only empowers the FDIC to choose which companies will be subject to liquidation under Title II, but also confers on the FDIC unilateral authority to provide special treatment to whatever creditors the FDIC, in its sole and unbounded discretion, decides to favor[.]” (Id. ¶ 11.)

Defendants have moved to dismiss the complaint on the grounds that plaintiffs lack Article III standing to pursue their claims, or, in the alternative, that their claims are not ripe. (See Def. Mot. at 4-5.) This is an unusual case, as plaintiffs have not faced any adverse rulings nor has agency action been directed at them. Most significantly, no enforcement action – “the paradigm of direct governmental authority” – has been taken against plaintiffs. FEC v. NRA Political Victory Fund, 6 F.3d 821, 824 (D.C. Cir. 1993). As a result, plaintiffs’ standing is more difficult to parse here than in the typical case. See, e.g., Noel Canning v. NLRB, 705 F.3d 490, 492-93 (D.C. Cir. 2013) (employer challenged NLRB decision finding that it had violated the National Labor Relations Act). Furthermore, while the Bank is a regulated party under Title X, none of the plaintiffs is subject to regulation under Titles I or II. Nonetheless, plaintiffs maintain that they have standing to pursue their Title I and II claims, based, respectively, on their status as competitors and as creditors of the regulated entities.



Plaintiffs bear the burden of establishing that the Court has jurisdiction over their claims. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 104 (1998). Nonetheless, “[f]or purposes of ruling on a motion to dismiss for want of standing, [the court] must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” Warth v. Seldin, 422 U.S. 490, 501 (1975). “While the burden of production to establish standing is more relaxed at the pleading stage than at summary judgment, a plaintiff must nonetheless allege ‘general factual allegations of injury resulting from the defendant’s conduct’ (notwithstanding ‘the court presumes that general allegations embrace the specific facts that are necessary to support the claim’).”[5] Nat’l Ass’n of Home Builders v. EPA, 667 F.3d 6, 12 (D.C. Cir. 2011). Moreover, where a court’s subject matter jurisdiction is called into question, the court may, as it has done here, consider matters outside the pleadings to ensure that it has jurisdiction over the case. See Teva Pharms., USA, Inc. v. U.S. Food & Drug Admin., 182 F.3d 1003, 1006 (D.C. Cir. 1999). “For each claim, if constitutional and prudential standing can be shown for at least one plaintiff, [the court] need not consider the standing of the other plaintiffs to raise that claim.” Mountain States Legal Found. v. Glickman, 92 F.3d 1228, 1232 (D.C. Cir. 1996).

A. Standing

“[T]o establish constitutional standing, plaintiffs must satisfy three elements: (1) they must have suffered an injury in fact that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical’; (2) the injury must be ‘fairly traceable to the challenged action of the defendant’; and (3) ‘it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.’” NB ex rel. Peacock v. Dist. of Columbia, 682 F.3d 77, 81 (D.C. Cir. 2012) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992)). Where a plaintiff is seeking declaratory or injunctive relief, he “must show he is suffering an ongoing injury or faces an immediate threat of injury.” Dearth v. Holder, 641 F.3d 499, 501 (D.C. Cir. 2011).

It is well-established that where “the challenged regulations ‘neither require nor forbid any action on the part of [the challenging party], ’ – i.e., where that party is not ‘the object of the government action or inaction’ – ‘standing is not precluded, but it is ordinarily substantially more difficult to establish.” Ass’n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 457-58 (D.C. Cir. 2012) (quoting Summers v. Earth Island Inst., 555 U.S. 488 (2009)). “In that circumstance, causation and redressability ordinarily hinge on the response of the regulated (or regulable) third party to the government action or inaction – and perhaps on the response of others as well.” Lujan, 504 U.S. at 562. It then “becomes the burden of the plaintiff to adduce facts showing that . . . choices [of the independent actors] have been or will be made in such a manner as to produce causation and redressibility of injury.” Id. The Supreme Court recently reaffirmed its hesitation to “endorse standing theories that require guesswork as to how independent decisionmakers will exercise their judgment.” Clapper v. Amnesty International, 133 S.Ct. 1138, 1150 (2013). Thus, as observed by the D.C. Circuit, “courts [only] occasionally find the elements of standing to be satisfied in cases challenging government action on the basis of third-party conduct.” Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930, 940 (D.C. Cir. 2004).

B. Ripeness

“‘Ripeness is a justiciability doctrine’ that is ‘drawn both from Article III limitations on judicial power and from prudential reasons for refusing to exercise jurisdiction.’” Devia v. Nuclear Regulatory Comm’n, 492 F.3d 421, 424 (D.C. Cir. 2007) (quoting Nat’l Park Hospitality Ass’n v. Dep’t of the Interior, 538 U.S. 803, 807-08 (2003)) (internal quotation marks and brackets omitted). “In assessing the prudential ripeness of a case, ” courts consider two factors: “the ‘fitness of the issues for judicial decision’ and the extent to which withholding a decision will cause ‘hardship to the parties.’” Am. Petroleum Inst. v. EPA, 683 F.3d 382, 387 (D.C. Cir. 2012) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967), overruled on other grounds by Califano v. Sanders, 430 U.S. 99, 105 (1977)). The underlying purpose of ripeness in the administrative context “is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.” Devia, 492 F.3d at 424 (quoting Abbott Labs., 387 U.S. at 148-49). Ripeness also prevents a court from making a decision unless it absolutely has to, underpinned by the idea that if the court does not decide the claim now, it may never have to. Id.


A. The Statutory Provision

Title I of Dodd-Frank established the FSOC. See 12 U.S.C. § 5321. The purposes of the Council are

to identify risks to the financial stability of the United States that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected bank holding companies or nonbank financial companies, or that could arise outside the financial services marketplace; [] to promote market discipline, by eliminating expectations on the part of shareholders, creditors, and counterparties of such companies that the Government will shield them from losses in the event of failure; and [] to respond to emerging threats to the stability of the United States financial system.

12 U.S.C. § 5322(a)(1). The Council has ten voting members: the Secretary of the Treasury, who serves as the Council Chairperson; the Chairman of the Federal Reserve Board; the Comptroller of the Currency; the Director of the CFPB; the Chairperson of the Securities and Exchange Commission (“SEC”); the Chairperson of the Federal Deposit Insurance Corporation (“FDIC”); the Chairperson of the Commodity Futures Trading Commission (“CFTC”); the Director of the Federal Housing Finance Agency (“FHFA”); the Chairman of the National Credit Union Administration (“NCUA”) Board; and an independent member with insurance expertise appointed by the President with the advice and consent of the Senate. See 12 U.S.C. § 5321(b)(1). The Council also includes five nonvoting members. See id. § 5321(b)(3).

Title I authorizes the Council, upon a two-thirds vote of its voting members, including the affirmative vote of the Treasury Secretary, to designate certain “nonbank financial companies” as “systematically important financial institutions” or SIFIs.[6] 12 U.S.C. §§ 5323(a)(1), (b)(1), 5365, 5366. SIFI designation is based on consideration of eleven enumerated factors leading to a determination that “material financial distress at the U.S. nonbank financial company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the U.S. nonbank financial company, could pose a threat to the financial stability of the United States.” 12 U.S.C. § 5323(a)(1). See id. (a)(2), (b)(2). If an entity is designated as a SIFI, it “will be subject to supervision by the Federal Reserve Board and more stringent government regulation in the form of prudential standards and early remediation requirements established by the Board.” (See id.) Before designating any company as a SIFI, the Council must give written notice to the company of the proposed determination. See 12 U.S.C. § 5323(e)(1). The company is entitled to a hearing at which it may contest the proposed determination. See id. § 5323(e)(2). Additionally, once the Council makes a final decision to designate a company as a SIFI, that company may seek judicial review of the determination, and a court will determine whether the decision was arbitrary and capricious. See id. § 5323(h). There is no provision for third-party challenges to SIFI designation under Title I. (See Second Am. ¶ 157.)

On April 11, 2012, following a notice-and-comment period, the Council published a “final rule and interpretive guidance . . . describ[ing] the manner in which the Council intends to apply the statutory standards and considerations, and the processes and procedures that the Council intends to follow, in making determinations under section 113 of the Dodd-Frank Act.” Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies, 77 Fed. Reg. 21637 (Apr. 11, 2012). On June 3, 2013, while this motion was pending, the Council voted to make proposed determinations regarding a set of nonbank financial companies but did not release the names of the designated companies. (See Second Supplemental Declaration of Frank Act, but because it has come into common parlance (see Def. Mot. at 3 n.2), and the parties have used the term throughout their briefs, the Court will do so as well. Gregory Jacob [ECF No. 34-1] (“Second Jacob Decl.”) ¶ 5; id., Exs. 3-4.) Those companies then had thirty days to request a hearing before a final determination would be made. (See Second Jacob Decl. ¶ 5.) American International Group, Inc. (“AIG”), Prudential Financial Inc., and the GE Capital Unit of General Electric have confirmed that they are among the designated companies. (See id. ¶ 6; id., Ex. 4.) AIG and GE Capital have chosen not to contest their designations, but Prudential has announced that it will appeal. See Danielle Douglas, Prudential enters uncharted legal realm by appealing its regulatory label, Wash. Post, July 3, 2013, at A14.

B. Count III

1. Injury-in-Fact

The Bank claims to have standing to challenge the creation and operation of the FSOC as a violation of the Constitution’s separation of powers. The Bank is not a regulated party under Title I and so, while “standing is not precluded, it is . . . substantially more difficult to establish” under these circumstances. Duncan, 681 F.3d at 457-58. The Bank’s theory of standing relies on an allegation of “competitor injury” arising out of the “illegal structuring of a competitive environment.” Shays v. Fed. Election Com’n, 414 F.3d 76, 85 (D.C. Cir. 2005). The D.C. Circuit has “recogniz[ed] that economic actors ‘suffer [an] injury in fact when agencies lift regulatory restrictions on their competitors or otherwise allow increased competition’ against them.” Sherley v. Sebelius, 610 F.3d 69, 72 (D.C. Cir. 2010) (quoting La. Energy & Power Auth. v. FERC, 141 F.3d 364, 367 (D.C. Cir. 1998)). The Court has also applied this principle to evaluate how campaign finance regulations affect the political “market, ” generalizing that “any one competing for a governmental benefit should [] be able to assert competitor standing when the Government takes a step that benefits his rival and therefore injures him economically.” Id.

Importantly, however, the plaintiff must allege that it is “a direct and current competitor whose bottom line may be adversely affected by the challenged government action.” New World Radio, Inc. v. FCC, 294 F.3d 164, 170 (D.C. Cir. 2002) (emphasis in the original). A plaintiff’s “‘chain of events’ injury is too remote to confer standing” where the plaintiff has not stated a “concrete, economic interest that has been perceptibly damaged” by the agency action. Id. at 172 (internal quotation marks and citation omitted) (emphasis in the original). See also KERM, Inc. v. FCC, 353 F.3d 57, 60-61 (D.C. Cir. 2004) (“party must make a concrete showing that it is in fact likely to suffer financial injury as a result of the challenged action”) (emphasis added). The Supreme Court has likewise made clear that there are limits to the competitor standing doctrine. For instance, in Already, LLC v. Nike, Inc., 133 S.Ct. 721 (2013), the Court rejected plaintiff’s “boundless theory of standing, ” remarking, “[t]aken to its logical conclusion, [plaintiff’s] theory seems to be that a market participant is injured for Article III purposes whenever a competitor benefits from something allegedly unlawful – whether a trademark, the awarding of a contract, a landlord-tenant arrangement, or so on.” Id. at 731.

The Bank relies on just such a “boundless theory.” Id. The assumption underlying the Bank’s assertion of injury is that the FSOC’s designation of GE Capital as a SIFI will confer a competitive advantage on GE and a corresponding disadvantage on the Bank. (See Private Plaintiffs’ Opposition to Defendants’ Motion to Dismiss [ECF No. 27] (“Pvt. Pl. Opp.”) at 36.)[7] The Bank alleges that GE Capital is its direct competitor in the market to raise capital and in the market to sell consumer loans, and that GE will benefit from a cost-of-capital advantage that “will place SNB at a competitive disadvantage in each” market. (Id. at 37.)

In support of the Bank’s allegation that GE is a direct and current competitor in the consumer loan market, Chairman and former President of SNB Jim Purcell asserts in a recent declaration that “approximately 37% of the Bank’s outstanding loans are agricultural loans” and “[a]ccording to publicly available information, GE Capital and its subsidiaries offer numerous loans in the agricultural sector, including in markets that are served by the Bank.” (Second Declaration of Jim R. Purcell [ECF No. 35-1] (“Second Purcell Decl.”) ¶¶ 4, 11.) Purcell indicates that there are two farm equipment dealerships within a 100-mile radius of the Bank that provide financing through GE Capital or its subsidiaries. (See id. ¶ 11.) With respect to the market to raise capital, Purcell indicates that “[t]he Bank competes with a wide variety of bank and non-bank financial institutions for deposits, ” and offers interest rates ranging from .05% on checking account deposits to .40% on 1-year CDs as of May 31, 2013. (See id. ¶¶ 13, 15.) Based on publicly available data, Purcell represents that GE Capital offers accounts that pay as much as 1.10% as of June 13, 2013. (See id. ¶ 17.) He asserts that “[c]ustomers can apply for these accounts and fund them online through the GE Capital website from anywhere in the United States, including the geographic areas in which the Bank does its business.” (Id.)

While these assertions lend some plausibility to the Bank’s allegation that GE is a “direct and current” competitor at least in the agricultural loan business, the Bank relies on conjecture to argue that the SIFI designation will benefit GE and harm the Bank.[8] The Bank speculates that the designation will cause investors to flock to the designees because they will be perceived as safer investments due to the possibility of government backing. (See 6/11/13 Motions Hearing Transcript (“Tr.”) at 72-73, 82.) Of course, SIFI designation does not, in fact, mean that the federal government is “backing” the SIFI or that the government will not allow the company to fail. Instead, it means that the SIFI will be subject to more stringent regulation and government oversight. See 12 U.S.C. § 5323(a)(1), (b)(1), 5365(c)(I). But whether SIFI designation will mean anything else is simply unknown at this early stage.

The ambiguous consequences of SIFI designation are underscored by David Price, the very source cited by the Bank:

The precise implications of being designated as a SIFI are not known yet because the new regulatory regime has not yet been defined. . . . On the plus side, SIFI designation may confer benefits on a company by reducing its cost of capital. Creditors may believe that enhanced supervision lowers an institution’s credit risk. . . .The extent of this benefit to creditors, if any, is not clear at this point however. . . . So far, institutions appear to believe that they would be worse off as SIFIs. In public comments filed with FSOC and in public statements, large nonbanks and their trade associations have argued that they should not be considered systematically important. . . . The institutions’ concerns about the regulatory regime for SIFIs may be heightened by a fear that the as-yet-unwritten rules will turn out to be overly restrictive.

David A. Price, “Sifting for SIFIs, ” Region Focus, Federal Reserve Bank of Richmond (2011), at (cited in Second Am. ¶ 145).

Indeed, one of the proposed SIFIs, Prudential Financial, is appealing its designation, which indicates that at least one nonbank perceives the designation more as a detriment than a benefit. On the other hand, GE Capital has declined to appeal, because it “is already supervised by the Fed and as a result has strong liquidity and capital.” (Third Supplemental Declaration of Gregory Jacob [ECF No. 36-1] (“Third Jacob Decl.”), Ex. 1, Daniel Wilson, GE Capital, AIG Accept SIFI Label While Prudential Protests, Law 360, July 2, 2013.) Since the SIFIs themselves are far from unanimous as to the consequences of being designated, it is difficult to prophesize that the designation confers a clear benefit on them, much less a corresponding disadvantage on non-SIFI institutions like SNB. See Already, Inc., 133 S.Ct. at 731. In short, the Bank has not come close to a “concrete showing that it is in fact likely to suffer financial injury as a result of the challenged action.” KERM, Inc., 353 F.3d at 60-61 (emphasis in original).

The Bank objects to defendants’ suggestion that the burden of being designated a SIFI may outweigh the advantages, arguing that “the Government cites no authority for the novel proposition that the benefits flowing from a statute should be netted against its harms for purposes of determining whether a party has been injured.” (Pvt. Pl. Opp. at 38-39.) But standing requires a showing of “certainly impending” injury, Clapper, 133 S.Ct. at 1151, and at this stage, nothing is certainly impending. The Bank’s theory of injury “require[s] guesswork as to how independent decisionmakers will exercise their judgment, ” id. at 1150, and consequently, guesswork as to whether the Bank will suffer an injury-in-fact from the designation of GE Capital or any other alleged competitor. Here the need for such guesswork defeats the Bank’s attempt to demonstrate that it faces an “imminent” injury. Lujan, 504 U.S. at 560-61.

2.Causation and Redressability

Furthermore, the Bank has not made an adequate showing with regard to the causation and redressability prongs of the standing requirement. See Lujan, 504 U.S. at 560-61. The Bank’s attenuated claim of causation is highlighted by its admission that large financial companies already enjoy a cost-of-capital advantage, even without a formal SIFI designation, because these institutions have been perceived by the public as “too big to fail.” (See Second Am. ¶ 146 (Federal Reserve Chairman Bernanke describing benefits that businesses enjoyed of being perceived as “too big to fail” before Dodd-Frank granted designation authority to FSOC).)

The Bank asserts that the

formal SIFI designations promulgated by the FSOC will enhance any direct cost-of-capital subsidy previously enjoyed by institutions considered by some in capital markets to enjoy unofficial SIFI status, by removing uncertainty as to the government’s views on their SIFI status, and will extend this direct cost-of-capital subsidy to institutions not previously considered by those in capital markets to enjoy unofficial SIFI status.

(See id. ¶ 148.) Indeed, GE Capital already offers interest rates between 2.75 and 22 times greater than those offered by the Bank. (See Second Purcell Decl. ¶¶ 13, 15, 17.) No explanation has been given for the disparity, but given the large gap in what the two institutions already offer, it is hardly reasonable to infer that GE’s greater ability to attract deposits is fairly traceable to the SIFI designation proposed only weeks ago or that it is redressable by a court. Whereas the Bank has demonstrated that GE Capital already has a distinct advantage, whether because of “unofficial SIFI status” or merely because it is a larger, more highly capitalized company, it can only speculate that SIFI designation will “enhance” this pre-existing benefit. Second Am. Compl. ¶ 148.) Because the Bank has failed to establish that GE’s SIFI designation is the cause of an injury to the Bank, it has also failed to establish that this Court could redress any such injury by invalidating Title I.


For the same reason that the Bank lacks standing, the Bank’s claim under Count III is not ripe: the lack of a “certainly impending” injury caused by Title I. See Coal. for Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 130 (D.C. Cir. 2012) (“Ripeness . . . shares the constitutional requirement of standing that an injury in fact be certainly impending.”) Therefore, in the absence of a concrete and particular injury, Count III will be dismissed under Fed.R.Civ.P. 12(b)(1).


A. The Statutory Provision

Pursuant to the OLA of Title II, the Treasury Secretary may appoint the FDIC as receiver of a failing “financial company.”[9] The purpose of Title II of Dodd-Frank is “to provide the necessary authority to liquidate failing financial companies that pose a significant risk to the financial stability of the United States in a manner that mitigates such risk and minimizes moral hazard.” 12 U.S.C. § 5384(a). Title II is viewed as providing “the U.S. government a viable alternative to the undesirable choice it faced during the financial crisis between bankruptcy of a large, complex financial company that would disrupt markets and damage the economy, and bailout of such financial company that would expose taxpayers to losses and undermine market discipline.” S. Rep. No. 111-176, at 4. The statute provides that this authority

shall be exercised in the manner that best fulfills such purpose, so that [] creditors and shareholders will bear the losses of the financial company; [] management responsible for the condition of the financial company will not be retained; and [] the [FDIC] and other appropriate agencies will take all steps necessary and appropriate to assure that all parties . . . having responsibility for the condition of the financial company bear losses consistent with their responsibility, ...

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