The Consumer Financial Protection Bureau has asked a federal judge in Washington, D.C., to uphold its recent rollback of fair-lending regulations, framing the challenge as a policy dispute rather than a defect in the rulemaking process. The case puts a familiar administrative-law question front and center: when does a change in agency priorities amount to a lawful course correction, and when does it become arbitrary and capricious?

According to the bureau, the challengers — consumer advocates contesting the rollback — are effectively asking the court to second-guess the agency’s substantive policy judgment.