The state plaintiffs argued the Orderly Liquidation Authority would affect long-standing bankruptcy law that allows equal treatment of creditors. The federal government said the provision is only applicable if the Federal Reserve and FDIC don't object. The authority is intended to apply to large financial institutions that have taken on too much debt.
The state attorneys general are objecting to the Orderly Liquidation Authority section of the law. The original lawsuit challenges the constitutionality of the law's Financial Stability Oversight Council, the Consumer Financial Protection Bureau and the appointment of its director, Richard Cordray, without U.S. Senate confirmation.