A federal court has intervened to halt the extensive termination of staff at the United States’ leading consumer protection agency. This decision comes shortly after the Trump administration sought to dismiss approximately 1,500 of the 1,700 employees at the Consumer Financial Protection Bureau (CFPB), amid ongoing investigations into potential violations of existing judicial orders. The ruling, issued by Judge Amy Berman Jackson, poses a legal obstacle to the mass layoffs announced on Thursday. This follows a federal appeals court’s decision to modify—but not fully remove—an injunction that restricted the agency’s ability to terminate its workforce.
The administration has yet to issue a response regarding the court’s latest ruling, leaving it uncertain whether they will comply. In related developments, several divisions within the CFPB have been completely disbanded, including the Office of Servicemember Affairs, the Office of Older Americans, and the Office of Fair Lending. The Office of Consumer Response now retains only eight employees, and the team responsible for the CFPB’s data storage systems has been entirely terminated.
The layoffs were facilitated by hundreds of reduction in force (RIF) letters distributed on Thursday. This move represents the latest challenge in an ongoing struggle concerning the agency’s precarious future. In February, Judge Jackson had previously ordered a suspension of terminations at the CFPB and restricted the agency from deleting data or reallocating reserve funds, except for operational necessities.
An employee, identified under the pseudonym Alex Doe, submitted a declaration stating that this week’s layoffs were overseen by Gavin Kliger, a staff member from Elon Musk’s “Department of Government Efficiency,” also known as Doge. It was reported that the team worked non-stop for 36 hours to ensure the notifications were dispatched on April 17. The declaration further noted that when concerns were raised about adhering to court orders requiring a “particularized assessment” of employees, the response focused solely on numerical goals.
The staff union has filed a motion seeking an order to demonstrate cause, asserting that the terminations contravene a court-ordered preliminary injunction prohibiting actions that could impede the defendants’ statutory responsibilities. One anonymous CFPB employee expressed concerns that essential statutory duties would not be completed due to the layoffs.
Following these cuts, all impacted employees are expected to lose system access by 6:00 PM local time on Friday, after which they will be placed on administrative leave until their formal separation. Senator Elizabeth Warren, who was instrumental in the establishment of the CFPB after the 2008 financial crisis, condemned the decision.
There are allegations that Elon Musk played a significant role in the agency’s shutdown, possibly to benefit his planned financial services platform, X Money. The CFPB, since its inception, has facilitated the recovery of over $21 billion for defrauded consumers through enforcement actions against major financial institutions, including a significant order against Wells Fargo in 2022. The agency enjoys widespread public support, with a September poll indicating that 91% of voters believe it is crucial to regulate financial services to ensure fairness for consumers.
Former CFPB employees have expressed dismay over the dismantling of the agency’s efforts and the impact on consumers nationwide.