A federal judge in Baltimore has dismissed the city’s attempt to stop the Consumer Financial Protection Bureau (CFPB) from emptying its reserves, dealing a setback to efforts aimed at preserving the agency’s financial independence.
The city, alongside the nonprofit Economic Action Maryland Fund, had sued to prevent CFPB Acting Director Russell Vought from cutting off funding and rendering the agency ineffective. However, the judge ruled that Baltimore failed to show the CFPB had made a concrete, final decision to defund itself.
Baltimore’s legal challenge centered on communications from CFPB officials, including a letter to Federal Reserve Chair Jerome Powell stating the agency required no additional funds and an email discussing the potential return of unspent money. The judge dismissed these as speculative, stating there was no clear evidence of an actual decision with legal consequences.
The ruling comes amid broader political battles over the CFPB’s authority. Republican lawmakers and business groups have long criticized the agency’s funding structure, but last year, the U.S. Supreme Court upheld its current financing model. Meanwhile, a separate lawsuit in Washington, D.C., challenges former President Donald Trump’s alleged efforts to dismantle the agency.
Jonathan McKernan, Trump’s nominee for CFPB director, has pledged to uphold consumer financial protections while advocating for a more “right-sized” and accountable agency.
For now, Baltimore’s bid to keep the CFPB’s funding intact has hit a roadblock, but the broader fight over the agency’s future is far from over.
