On Friday, a federal judge temporarily paused the latest round of layoffs at the Consumer Financial Protection Bureau, raising new concerns about the Trump administration’s ongoing attempts to restructure the agency. The temporary halt, issued by District Court Judge Amy Berman Jackson, was prompted by the revelation that the agency may have violated a previous court order restricting layoffs at the bureau.
Judge Jackson had initially issued a preliminary injunction on March 28, blocking the Trump administration from proceeding with mass layoffs at the CFPB until further review. This order came after the administration, led by CFPB Acting Director Russell Vought, had made significant strides in reducing the agency’s workforce, cutting it by nearly 90%. Despite Jackson’s ruling, the administration moved forward with sending out reduction-in-force (RIF) notices to over 1,400 employees on Thursday, claiming that these layoffs were necessary to restructure the bureau to better align with its current priorities.
However, attorneys representing the National Treasury Employees Union, which filed the lawsuit against the agency, quickly flagged the layoffs as potentially in violation of the court’s March 28 injunction. In response, Judge Jackson issued a temporary order halting the layoffs, particularly the termination of employees’ access to work systems, which was set to take effect at 6 p.m. Friday.
In her ruling, Judge Jackson expressed concerns that the agency might be flouting the court’s orders, noting that the actions appeared to be a deliberate effort to bypass legal requirements. She stated, “There is reason to believe that the defendants simply spent the days immediately following the Circuit’s relaxation of the Order dressing their RIF in new clothes, and that they are thumbing their nose at both this Court and the Court of Appeals.” The judge also noted that the speed of the layoffs, in combination with a lack of consultation with relevant department heads, raised serious doubts about whether the mandated “particularized assessments” were actually conducted as required by the court.
These assessments were supposed to ensure that any layoffs would not interfere with the agency’s ability to perform its statutory duties. As of now, the remaining staff at the CFPB is vastly reduced, with some critical functions at risk of being left without the manpower to continue operating. According to the declarations filed in court, entire offices have been reduced to one employee or eliminated entirely. A member of the RIF team said that a staffer from the Department of Government Efficiency kept the team working for 36 hours straight in order to have the layoff notices ready to be sent out last Thursday.
The latest developments have drawn sharp criticism from lawmakers and consumer advocates alike. Sen. Elizabeth Warren [D-Mass.], who spearheaded the creation of the CFPB, condemned the administration’s actions as “another assault on consumers and our democracy.” Advocates, including Erin Witte of the Consumer Federation of America, warned that dismantling the bureau’s staff would embolden bad actors in the financial industry, further compromising consumer protections.
The case is far from settled, and Judge Jackson has scheduled a hearing for April 28 to determine the next steps. In the meantime, the temporary halt to the layoffs is seen as a critical step in preserving the agency’s ability to protect consumers while the courts continue to weigh the legality of the administration’s actions.
