CFPB funding and operation
National Treasury Employees Union v. Russell Vought
Mayor and City Council of Baltimore v. Consumer Financial Protection Bureau
Date: March 28, 2025
Issue: Should the District of Columbia grant preliminary injunctions in lawsuits alleging the Consumer Financial Protection Bureau (CFPB) and its Acting Director Russell Vought violated the Administrative Procedure Act (APA) by using the bureau’s funding mechanism to defund itself?
Case Summary: A Washington, D.C., federal court granted the National Treasury Employees Union’s (NTEU) motion for a preliminary injunction in its lawsuit claiming CFPB is unlawfully using its funding process to shut itself down.
On Feb. 12, 2025, the mayor, Baltimore’s city council, and co-plaintiffs (collectively Baltimore) sued CFPB in the U.S. District Court of Maryland. They claimed the bureau acted arbitrarily and abused its discretion by intentionally underfunding itself and failing to meet its legal duties. Baltimore also sought a temporary restraining order (TRO) to block further defunding. After discussions, the parties converted the TRO request into a motion for a preliminary injunction. The next day, the NTEU and its co-plaintiffs (collectively NTEU) sued CFPB in the District of Columbia, alleging President Trump and Acting Director Vought violated the Constitution, the APA, and Congress’ mandate by suspending the bureau’s required activities and effectively shutting it down. NTEU also moved for a preliminary injunction.
On March 14, 2025, Judge Matthew J. Maddox denied Baltimore’s request for a preliminary injunction, concluding the CFPB’s consideration of transferring funds does not prove it is trying to abolish itself. The court found that CFPB’s consideration of transferring funds does not prove it is trying to abolish itself and neither Vought’s letter to the Federal Reserve, recent CFPB activity, nor public political statements showed a final decision to defund the agency.
However, on March 28, 2025, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia granted NTEU’s motion emphasizing that the court cannot look away or CFPB will be dissolved and dismantled well before the lawsuit reaches its conclusion. The court ruled it had subject matter jurisdiction and found that NTEU’s APA claims were based on final, reviewable agency action. While CFPB argued the claims were just generalized grievances about policy, the court held that the agency’s impending shutdown qualifies as a reviewable action under the APA.
The court also found that NTEU had standing to sue. The court explained that NTEU and its co-plaintiff the CFPB Employee Association showed a clear injury, noting that NTEU represents CFPB employees, and the association includes current, former and even fired probationary employees. The court noted that unions and similar groups can sue on their own behalf, on behalf of members, or both. The court also ruled that co-plaintiffs — the National Consumer Law Center, the Virginia Poverty Law Center, and Reverend Eva Steege — suffered concrete injuries. The advocacy groups showed harm as consumer organizations, and Steege showed harm as an individual who relied on CFPB assistance when it allegedly stopped its work. The court further found that NTEU satisfied the causation and redressability requirements for Article III standing.
After confirming NTEU’s standing, the court ruled that a preliminary injunction was necessary to preserve the status quo. The court concluded that NTEU is likely to succeed on the merits of its constitutional claims. The court noted that CFPB began shutting down on February 10 and continued despite a February 14 consent order prohibiting layoffs, reduction-in-force notices, record destruction, or self-defunding. CFPB cited a March 2 email from its Chief Legal Officer Mark Paoletta, claiming employees were supposed to be working all along, but the court found that the email lacked evidentiary value. CFPB also submitted a declaration from Chief Operating Officer Adam Martinez, who claimed new leadership was taking a more measured approach. The court rejected this claim, noting the same people remained in charge and that Martinez lacked personal knowledge to support his statements. The court emphasized that CFPB still faces serious risk.
The court also determined that NTEU is likely to succeed on the merits of its APA claims. The court noted that CFPB’s February 10 order halted all work, including statutorily mandated. The court stressed that CFPB had been eager to “wrap things up” and that only a court order could preserve the status quo while the case proceeds.
Finally, the court concluded that NTEU would face irreparable harm without an injunction. It warned that the CFPB could shut down in just over a month, leaving no chance for later relief. Once dismantled, employees could not be reinstated or regain health coverage, and consumers would have no one to call for help. The court also explained that the balance of equities and the public interest weigh in favor of preliminary relief.
The court explained that the preliminary injunction keeps the CFPB operating until the case is resolved. It restores and preserves the Bureau’s contracts, workforce, data and operations while protecting employees’ ability to perform their duties.
Bottom Line: On March 29, 2025, the U.S. Department of Justice appealed Judge Jackson’s decision one day after it was issued.
Documents: Opinion; NTEU Consent Order
