By Jonathan Stempel
(Reuters) – A federal judge in Baltimore on Friday rejected the city’s efforts to temporarily block the Consumer Financial Protection Bureau, rather than clearing its reserves and returning funds to the U.S. Federal Reserve or the Treasury Department.
U.S. District Court Judge Matthew Maddox said Baltimore should not receive a preliminary injunction because it is unlikely to prove that the CFPB allocates itself with a “discrete and final” decision.
Baltimore and nonprofit economic action Maryland Fund (formerly the Maryland Consumer Rights Alliance) sued on February 12 to prevent CFPB acting director Russell Russell Russell from avoiding starving cash institutions and ‘dead in the water’.
The plaintiff’s attorney said they were reviewing the decision. CFPB did not immediately respond to a request for comment.
Many Republican and business groups have long complained that the CFPB is not under control.
Last May, the U.S. Supreme Court rejected the challenge of two payday lenders’ trading groups on how the agency funded.
In seeking the ban, Baltimore quoted a February 8 letter to Fed Chairman Jerome Powell, in which Jerome Powell said the CFPB would not need money in the next funding draw.
It also quoted an email from February 11, with CFPB chief operating officer Adam Martinez saying the agency has contacted about its ability to return the currency.
But the judge said everything Baltimore did was “challenge an invisible and unfulfilled decision to consume CFPB’s operating capital and reserves without any evidence that such a decision had been reached or any legal consequences.”
A separate lawsuit challenges Republican President Donald Trump’s alleged efforts to remove the CFPB in Washington, D.C., federal court.
Senior CFPB officials expressed doubts in this case that the agency’s reserves could be returned.
Jonathan McKernan, the nominee for Trump’s CFPB director, promised during a February 27 Senate confirmation hearing to fully enforce the Consumer Financial Protection Act, while saying he wanted to “correctly” the agency “correctly” and make it more responsible.
The case is the Mayor and City Council of Baltimore et al., U.S. District Court, Maryland, No. 25-00458, U.S. District Court.
(Reported by Jonathan Stempel, New York; Edited by Richard Chang)
