Two attorneys general are explaining why their states filed a
lawsuit against language in the Dodd-Frank Act.
Oklahoma Attorney General E. Scott Pruitt briefly
summarizes the "Orderly Liquidation" title of Dodd-Frank Act
-- the reason for the lawsuit filed by him and attorneys
general from Michigan and South Carolina.
"It's been over two years ago that Dodd-Frank was passed. The
White House, the Congress at the time saw the financial crisis as
an opportunity to consolidate and concentrate power into
Washington, DC -- and in the case of the liquidation authority,
into one person," he explains. "It permits the Treasury secretary
to literally seize and liquidate a company, and the only safeguard
against that liquidation is 24 hours' notice."
The only way to stop the liquidation is with the intervention
of a federal judge. Pruitt believes that is a violation of due
process and separation of powers.
South Carolina Attorney General Alan Wilson says the same could
be said for his state.
"It takes financial institutions and it liquidates
them in a way that is not uniform," Wilson notes. "It's subject to
the arbitrary whims of unelected bureaucrats, and it puts states
like South Carolina -- or any other states that have invested
millions of dollars in pension funds with these financial
institutions -- at risk, because when we invest in them and these
financial institutions are liquidated, what it could effectively do
is put South Carolina as a second-class creditor."
Wilson adds the bureaucrats in Washington, DC, would determine
who gets paid and how much.
The lawsuit was filed in the DC Circuit Court. Other lawsuits
relating to Dodd-Frank are pending.