On December 5, a coalition of nonprofit organizations filed a complaint seeking declaratory and injunctive relief in the U.S. District Court for the Northern District of California against the CFPB and Acting Director Russell Vought. The plaintiffs alleged the CFPB’s refusal to request funds from the Fed, as contemplated by 12 U.S.C. § 5497, violates the APA. The complaint asserted the Dodd-Frank Act obliges the CFPB director to request the funds “reasonably necessary” to execute the agency’s responsibilities. The organizations claimed this refusal is intended to shutter the CFPB by “starving” it of funding, that the director has not requested funding since February, and that the agency has begun preparing for a potential shutdown, including developing furlough plans and transferring litigation to DOJ. The plaintiffs further asserted that DOJ’s “combined earnings” interpretation is inconsistent with the CFPB’s past practice and the statutory purpose of providing stable, non-appropriated funding. In any event, they argue, the Federal Reserve System now has combined earnings sufficient to fund the agency, even under DOJ’s interpretation.

On December 9, the plaintiffs filed a motion for summary judgment, asking the court to declare the CFPB’s refusal to request funding unlawful and to order the agency to comply with its statutory obligations. The motion argued there are no disputed factual issues and that the case can be resolved as a matter of law.