Judge Rejects Baltimore’s Bid for Relief in CFPB Defunding Lawsuit
A federal judge Friday denied the city of Baltimore’s request to temporarily halt the Trump administration’s effort to defund the Consumer Financial Protection Bureau (CFPB).
The judge determined that Baltimore and a non-profit organization being represented by Democracy Forward, failed to show that CFPB leaders made a final decision to effectively dismantle the consumer watchdog agency by sending its funding back to the Federal Reserve or the Treasury Department.
“For the Court to intervene and entangle itself in the Bureau’s administrative processes before the agency has made any final decision about the disposition of its operating and reserve funds — and without clear indication that an unlawful and injurious decision will be made imminently — would exceed the bounds of the Court’s proper role and jurisdiction,” said U.S. District Judge Matthew Maddox, who was appointed by former President Joe Biden.
“It would be especially improper for the Court to risk exceeding its limited role on a preliminary basis,” the judge added.
Feb. 14:
Trump Admin Halts Defunding Nation’s Financial Watchdog Agency After Lawsuit
President Donald Trump’s administration halted defunding the Consumer Financial Protection Bureau (CFPB), after Democracy Forward, on behalf of the city of Baltimore and a nonprofit, filed a lawsuit.
According to a joint motion filed Thursday, the plaintiffs and the Trump administration — specifically Office of Management and Budget Director Russell Vought, who’s currently the acting head of the CFPB — agreed that none of the agency’s funding will change until the court hears the case.
“The Consumer Financial Protection Bureau protects all Americans from predatory and discriminatory practices,” Democracy Forward President and CEO Skye Perryman said in a statement. “It has returned $20 billion back to the American public, yet again, it is unfortunate we have had to resort to litigation to protect this consumer watchdog.”
Feb. 12:
City of Baltimore Sues to Stop Dismantling of Nation’s Financial Watchdog Agency
Democracy Forward filed a lawsuit on behalf of the city of Baltimore, Maryland and the economic justice organization Economic Action Maryland Fund on Wednesday to block President Donald Trump’s efforts to dismantle the Consumer Financial Protection Bureau (CFPB) — the nation’s financial watchdog agency.
On Tuesday, the CFPB sent termination notices to dozens of staffers, according to reporting from CNBC. The mass layoffs come just a week after Russell Vought, the head of the White House’s Office of Management and Budget and acting director of CFPB, halted the agency’s work and instructed employees to stay home. Notably, Vought is one of the chief architects of Project 2025, which called for abolishing the agency altogether.
According to the lawsuit, the Trump administration is attempting to shutter CFPB by cutting off its funding from the Federal Reserve System, “to effectively defund the CFPB and leave it unable to carry out its congressionally mandated mission and specific statutory responsibilities.”
“Defendants have already announced their intention not to draw additional funds for the CFPB, claiming that the agency’s existing operating reserves are sufficient. Now Defendants are poised to transfer away those operating reserves, leaving the CFPB defunded and dead in the water,” the lawsuit claims.
The plaintiffs, which include the mayor and city council of Baltimore, explain that they rely on the resources and work of the CFPB and “would be irreparably harmed by the Defendants’ unlawful action.”
Specifically, the Baltimore City Law Department relies on CFPB’s consumer complaint database to help protect residents from predatory business practices — like discrimination in lending and other financial scams. The lawsuit alleges that the Trump administration’s actions to effectively shut it down violates the Administrative Procedure Act.
“Without CFPB, people in Baltimore would be more at risk of being tricked and trapped by shady financial practices, and the city would be forced to divert resources from other essential functions just to provide the same level of protection that residents enjoy now,” the lawsuit said. “Moreover, without the CFPB, Baltimore would be deprived of important information regarding potential predatory practices and consumer protection efforts that it has used to best serve the people in its boundaries.”