The ongoing situation at the Consumer Financial Protection Bureau is now being engaged on two fronts — the actions being taken by the administration to dramatically downsize the scope of the agency and the legal challenges that are now being filed to try and stop the administration from taking these actions. There was news on both fronts yesterday. And there may be a “mass layoff” at the Bureau that could happen as soon as today, according to a claim made in a lawsuit filed against the CFPB.
Yesterday, it was announced that the CFPB had notified as many as 100 “term employees” — full-time workers on contracts — that they were being let go. Some of the staffers discovered their access to the Bureau’s network had been eliminated before they were informed that they were being fired.
Also yesterday, the National Treasury Employees Union (NTEU), along with advocacy groups like the National Consumer Law Center, the NAACP, and others filed a lawsuit in federal court claiming that CFPB Acting Director Russell Vought’s actions are unlawful, including suspending the agency’s statutory functions and returning funds to the Federal Reserve, effectively defunding the agency. The plaintiffs highlight how these actions violate the Administrative Procedure Act and go against Congress’s constitutional authority. The CFPB has indicated its intent to cancel its lease for its headquarters in Washington, D.C., and “are also preparing to conduct another mass firing, this time of over 95% of the Bureau’s employees,” the plaintiffs claim in their suit. “That would make it impossible for the Bureau to fulfill any of its statutorily required functions.”
Pastor Eva Steege, one of the plaintiffs in the lawsuit, was scheduled to meet with the CFPB to resolve issues with her student loan forgiveness application but had her meeting abruptly canceled due to the shutdown.
The plaintiffs in the lawsuit are asking the court to block the administration’s actions and restore the agency’s operations, which they argue are essential for protecting consumers and ensuring a fair financial marketplace.
