CFPB funding and operation
National Treasury Employees Union v. Russell Vought
Mayor and City Council of Baltimore v. CFPB
Date: February 12, 2025
Issue: Whether the Consumer Financial Protection Bureau (CFPB) and its director, Russell Vought, violated the Administrative Procedure Act (APA) by using the bureau’s funding mechanism to defund itself.
Case Summary: The city of Baltimore and The National Treasury Employees Union each sued CFPB, accusing it of unlawfully using its funding mechanism to abolish itself.
City of Baltimore Lawsuit. On Feb. 12, 2025, the mayor, the city council of Baltimore, and the Economic Action Maryland Fund (collectively Baltimore) sued CFPB in the U.S. District Court of Maryland, alleging the bureau violated the APA. It claimed the bureau acted arbitrarily, capriciously, and abused its discretion by deliberately leaving itself without enough funding to perform its legally mandated duties. Baltimore also asserted that CFPB exceeded its authority because the Director must request the transfer of funds “reasonably necessary to carry out the authorities of the bureau under Federal consumer financial law” and has no power to defund the agency unilaterally. Baltimore stressed that it, like many others nationwide, depends on CFPB and would suffer irreparable harm from its unlawful actions.
Baltimore requested that the court declare the defunding of CFPB to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the APA. It also requested that the court enjoin CFPB and all of its officers from taking any steps to defund the bureau. Finally, it requested that the court set aside and hold unlawful the defunding decision. Baltimore also moved for a temporary restraining order enjoining CFPB from taking further steps to defund the bureau.
National Treasury Employees Union Lawsuit. Separately, on Feb. 13, 2025, the National Treasury Employees Union, National Consumer Law Center, National Association for the Advancement of Colored People, Virginia Property Law Center, CFPB Employee Association, and Pastor Eva Steege (collectively plaintiffs) sued CFPB in the U.S. District Court for the District of Columbia. Plaintiffs argued that neither the President nor CFPB director can dismantle an agency that Congress created. They claimed that by suspending CFPB’s legally mandated activities, Trump and Vought’s alleged shutdown of the bureau violated core constitutional separation of powers principles, Congress’s explicit statutory directive, and the APA. Plaintiffs also argued that Trump and Vought’s actions have caused widespread confusion and significantly harmed consumers nationwide. Without immediate relief, plaintiffs warned, countless civil servants and consumers who rely on CFPB to resolve urgent financial disputes could face severe financial hardships, including foreclosure.
Plaintiffs requested a temporary restraining order and a preliminary injunction to stop Vought and CFPB from shutting down operations. They also sought an injunction preventing Vought and CFPB from enforcing or following orders to halt work without congressional approval.
Bottom Line: CFPB’s answers to Baltimore and National Treasury Employees Union’s complaints are due April 14, 2025.
Documents: National Treasury Complaint; Baltimore Complaint
