Protecting Pension Funds from Dodd-Frank

Eleven Republican Attorneys General joined State National Bank of Big Spring against Secretary of Treasury Jack Lew challenging the Orderly Liquidation Authority under Title II of the Dodd-Frank Act. The secretive process by which federal regulators pick winners and losers in liquidation proceedings threatens the solvency of state pension and other funds which invest in bonds issued by large financial institutions. The liquidation under the Act is outside the scope of traditional Chapter 7 or 11 proceedings. The state plaintiffs include South Carolina, Michigan, Oklahoma, Georgia, West Virginia, Kansas, Alabama, Nebraska, Texas, Ohio and Montana. In early 2014, the plaintiffs appealed the lower court decision to the D.C. Circuit Court of Appeals arguing that district court wrongfully found they lacked standing to bring challenges against Title II of the Act. They urged the D.C. Circuit to overturn the decision arguing that they have standing to bring the suit because the legislation has already stripped them of their property rights under the U.S. Bankruptcy Code. The cases are State National Bank of Big Spring et al. v. Jacob J. Lew et al., case number 13-5247, and States of South Carolina, et al. v. Jacob J. Lew et al., case number 13-5248, in the United States Court of Appeals for the District of Columbia Circuit. To view the opening brief of the state appellants, click here.

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