In what could prove to be a new pathway for credit unionslooking to escape burdensome regulations set forth by the CFPB, athree-judge panel from the D.C. Circuit Court ruled unanimouslythat a small community bank in Texas had the standing to challengethe constitutionality of the CFPB.

The suit was originally shot down by a judge in the lower court,ruling the plaintiffs didn't have the standing to challenge theagency.

The State National Bank of Big Spring, Texas, and itsco-plaintiffs, the Competitive Enterprise Institute and the 60 PlusAssociation, filed a suit against the CFPB after the bank wasunable to continue issuing mortgage loans to lenders and complete wire transfers due toCFPB rules. John Berlau, a senior fellow at CEI, said his thinktank had long been bothered by the lack of accountability of theCFPB and that the bureau's practices raise multiple constitutionalissues.

The suit is not focused on the injuries caused by the CFPB to small financial institutions dueto the bureau's rule interpretations, but rather on a lack ofchecks and balances. He said 11 states have signed on to thecase.

Berlau said the issue is that the CFPB is not subject tocongressional accountability through the appropriations process,lacks a multi-member leadership and was appointed initially by a“recess” process – the same process that the Supreme Court ruled asillegal for the National Labor Relations Board.

Berlau said he is optimistic and very glad that the victory wasbipartisan and unanimous.

“We look forward to pressing this,” he said.

However, the three-judge panel did not give the plaintiffseverything they had asked for. The court ruled they did not havestanding to challenge Dodd-Frank's Financial Stability OversightCouncil and Orderly Liquidation Authority.

In a recent online post, Berlau said the plaintiffs are evaluating theiroptions in that regard.