On February 12, a complaint was filed in the U.S. District Court for the District of Maryland against the CFPB and its Acting Director, Russell Vought. The plaintiffs — which include the Mayor and City Council of Baltimore, and a nonprofit organization — seek injunctive and declaratory relief against actions taken by the defendants.

The complaint alleged the defendants are attempting to defund the CFPB by not requesting additional funds and by transferring the Bureau’s operating reserves, which they asserted would leave the Bureau unable to fulfill its statutory responsibilities. The plaintiffs argued this action is unlawful under the APA since it is arbitrary, capricious and exceeded statutory authority. The complaint details the role of the CFPB in enforcing federal consumer protection laws and the potential harm to the plaintiffs if the CFPB is defunded. The plaintiffs argued they and others rely on the CFPB’s resources and enforcement activities to protect residents from unfair financial practices and to support consumer education and advocacy efforts.

Vought agreed to delay eliminating the agency’s budget for at least two weeks while proceeding with plans to reduce its workforce in a joint motion for a briefing schedule filed on February 13. This decision is part of a legal process involving the city of Baltimore, where both parties have requested that Judge Adam B. Abelson of the U.S. District Court for the District of Maryland assess whether Vought has the authority to transfer funds from CFPB reserve accounts and implement other measures to decrease its available cash.

Visit our resource center, CFPB Pause: Where From Here?, to stay on top of the latest and what it may mean for the federal and state regulatory and enforcement landscape.