The Consumer Financial Protection Bureau (CFPB) was established to protect Americans from predatory financial practices, ensuring fairness in banking, lending, and consumer financial markets. The agency has secured billions in relief for consumers, held corporations accountable for misconduct, and enforced financial protections across the country. Despite its critical role, the Trump administration is now attempting to defund the CFPB, effectively dismantling the agency and stripping away protections for millions of Americans.
On February 12, 2025, the City of Baltimore and Economic Action Maryland Fund, represented by Democracy Forward, filed an emergency lawsuit to stop this unlawful action. The complaint challenges the CFPB Director, Russ Vought’s attempt to drain the CFPB’s operating reserves, preventing it from carrying out its congressionally mandated responsibilities.
The lawsuit argues that this effort violates the Administrative Procedure Act and exceeds legal authority, as the CFPB Director is legally required to request funding necessary for the agency’s operations.
Without court intervention, the administration’s move would leave the CFPB unable to investigate predatory lenders, combat fraud, or enforce financial protections, putting consumers at risk. The lawsuit seeks an immediate halt to this unlawful defunding effort to ensure the CFPB remains operational and continues its vital work protecting the financial rights of Americans.
On February 14th, as a consequence of the lawsuit, Vought agreed to pause unilateral defunding.
Throughout the case’s proceedings, CFPB representatives repeatedly represented that they do not have the legal authority to transfer away the reserve fund. With those representations well documented, on May 29, 2025, plaintiffs moved to dismiss the case, reserving the right to take action in the future if any of the reserve funds are, in fact, transferred.
Timeline
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The City of Baltimore and Economic Action Maryland Fund, represented by Democracy Forward, file an emergency lawsuit challenging CFPB Director Russ Vought’s attempt to drain the agency’s operating reserves, an action that would effectively defund the CFPB and prevent it from carrying out its congressionally mandated duties.
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As a result of the lawsuit, CFPB Director Russ Vought agrees to pause unilateral defunding efforts, temporarily halting any transfer of CFPB reserve funds.
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Plaintiffs move to dismiss the case, while expressly reserving the right to return to court if any CFPB reserve funds are transferred in the future.
