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A federal judge in Baltimore on Friday declined to side with the city’s effort to halt the Consumer Financial Protection Bureau (CFPB) from emptying its reserves and returning funds to the Federal Reserve or the U.S. Department of the Treasury.
On Feb. 12, the city filed the suit alongside the nonprofit Economic Action Maryland Fund. The parties aimed to stop CFPB acting director Russell Vought from an effort they claimed would leave the bureau “dead in the water,” according to reporting from Reuters.
But U.S. District Court Judge Matthew Maddox, an appointee of former President Joe Biden, rejected the petition. He ruled that the move by the bureau and the Trump administration did not constitute a “final agency action,” which is required in any ruling invoking the Administrative Procedures Act (APA).
“For the Court to intervene and entangle itself in the bureau’s administrative processes before the agency has made any final decision about the disposition of its operating and reserve funds — and without clear indication that an unlawful and injurious decision will be made imminently — would exceed the bounds of the court’s proper role and jurisdiction,” Maddox ruled, according to a report from The Hill.
Maddox added that it would be “especially improper” for the court to risk exceeding its authority on a “preliminary basis.”
In the initial complaint, the plaintiffs argued that zeroing out the bureau’s funding requests amounted to its dismantling “by fiat.” A letter from Vought to the Federal Reserve that was part of the court filings showed a request of $0 for the third quarter of the current fiscal year.
Under the law, a full dismantling of the CFPB would require approval from Congress. But the Trump administration has moved to aggressively curtail the enforcement posture of the bureau through the funding moves and by the closure of its Washington, D.C., headquarters.
In the weeks since, administration officials have said they plan to keep a “streamlined” CFPB in operation. They say that the president’s nomination of Jonathan McKernan to serve as the bureau’s next full-time director indicates his intent to keep the agency running.
But testimony in another court case has also shown that the scaling back of staff and operations has led to turmoil within the agency. This led another federal judge to contemplate a pause to administration actions that some employees say are designed to “unwind” the bureau.
