Over 1,400 employees who were about to be laid off from the Consumer Financial Protection Bureau (CFPB) will be able to keep working for at least another week after a federal judge intervened in the dismantling of the independent regulator on Friday.
Judge Amy Berman Jackson in Washington, DC, said the Trump administration could not move forward with the layoffs, which hit roughly 90 percent of the agency, until it presents more evidence about how the terminations have been carried out. The employees learned on Thursday that they were going to lose access to agency systems the following evening and their final date of employment would be June 16. Now, a hearing on the matter is scheduled for April 28. Jackson had previously issued a ruling slowing the firings of probationary employees at the CFPB in February.
Since its establishment by Congress in 2010, the CFPB has helped consumers fight banks and other companies over dubious fees, racial discrimination in lending, and a number of scams. But some conservatives have called for the agency to be dismantled to limit the regulation of businesses, and some companies, including tech giants, have questioned its expanding oversight. This week, an agency official told staff that cases on medical debt, student loans, consumer data, and digital payments would be de-prioritized.
Groups including the National Treasury Employees Union, which represents part of the CFPB workforce, sued the Trump administration in February in an effort to preserve the agency after its acting director, Russell Vought, sought to lay off workers and bring some projects to a stop. That prompted judge Jackson’s initial ruling calling for a pause on the initial cuts until the Trump administration provided more information. Part of her ruling was overturned by an appellate court, and the Trump administration also could appeal her order from Friday blocking the widespread layoffs.
For the time being, two current CFPB employees say they are continuing to work on their cases, including ongoing litigation.
In a court filing to Jackson on Friday, an anonymous employee said Gavin Kliger, a member of Trump’s so-called Department of Government Efficiency, managed the disputed layoffs of nearly 1,500 workers. “He kept the team up for 36 hours straight to ensure that the notices would go out yesterday (April 17),” the anonymous worker wrote. “Gavin was screaming at people he did not believe were working fast enough to ensure they could go out on this compressed timeline, calling them incompetent.”
Mark Paoletta, the agency’s chief legal officer, wrote in a separate filing on Friday that he and two other CFPB attorneys assessed “line by line” how to “right-size” the bureau. They determined that about 207 employees would be sufficient to carry out duties required by law, according to the filing, which justified laying off the rest of the agency’s roughly 1,700 employees.
“Leadership has discovered many instances in which the Bureau’s activities have pushed well beyond the limits of the law,” Paoletta wrote, citing cases pursued “without the slightest evidence of intentional discrimination” and “into new areas beyond its jurisdiction such as peer-to-peer lending, rent-to-own, and discrimination as unfair practice.”
