The City of Baltimore yesterday voluntarily dismissed its lawsuit against the Consumer Financial Protection Bureau and acting Director Russell Vought, bringing an end to its challenge of the Trump administration’s alleged plan to defund the agency.
In a filing, the city and co-plaintiff Economic Action Maryland Fund announced the decision to drop the case without prejudice, citing repeated assurances from the CFPB that it lacks the legal authority to transfer reserve funds away from its control. The plaintiffs had claimed that such a transfer would effectively dismantle the agency, violating the Administrative Procedure Act.
“The Bureau only transfers funds for the payment of expenditures incurred in the normal course of Bureau activities pursuant to its statutory obligations,” the CFPB previously told the court. Both the agency’s Chief Financial Officer and Chief Operating Officer confirmed under oath that there is no mechanism by which funds could be returned to the Federal Reserve or transferred to any other entity.
These sworn declarations convinced the plaintiffs to withdraw the case, though they noted they would consider further legal action if the CFPB later contradicts these representations.
The lawsuit had been one of several recent legal efforts to block staffing cuts and policy rollbacks at the CFPB, which has faced mounting pressure from the Trump administration. Judge Matthew Maddox previously denied Baltimore’s request for a temporary restraining order, citing the lack of a “final agency action.” The city initially argued that it relied heavily on the CFPB’s resources to protect its residents from financial abuse. The withdrawal of the CFPB, the city claimed, would leave its residents vulnerable to predatory lending, financial scams, and other forms of exploitation.
Democracy Forward, the legal group representing the plaintiffs, called the dismissal a win for consumers, stating that it blocked an immediate threat to the Bureau’s independence.
