A federal judge in Washington, D.C., has issued an order preventing the Consumer Financial Protection Bureau (CFPB) from proceeding with further employee layoffs. This decision comes after the agency terminated over 100 employees earlier this week, sparking concerns among staff about potential mass job cuts.
The ruling, delivered by Judge Amy Berman Jackson of the U.S. District Court, also prohibits the CFPB from deleting or removing any data from its systems. Additionally, the agency is barred from transferring funds from its reserve accounts unless the transactions are for operational purposes.
The CFPB, led by acting Director Russell Vought, had already dismissed numerous employees with up to four years of service earlier this week. Staff had anticipated more layoffs as early as Friday. Vought had also instructed employees to cease all work and closed the agency’s headquarters for the week.
These layoffs are part of a broader initiative by the Trump administration, in collaboration with Elon Musk’s Department of Government Efficiency (DOGE) team, to reduce the federal workforce significantly. Recent actions include the termination of approximately 1,300 employees, or 10% of the workforce, at the Centers for Disease Control and Prevention (CDC) last Friday.
The judge’s decision follows reports that members of the DOGE team were granted access to the CFPB’s systems, raising concerns about potential data breaches. The agency’s former chief technologist had previously warned that the Trump administration might delete critical data containing sensitive information.
Judge Jackson, an Obama appointee, issued the ruling in response to a lawsuit filed by the National Treasury Employees Union (NTEU), which represents CFPB staff. The union argued that the agency’s order to halt work was unlawful and that the administration’s access to its data violated the Privacy Act. A hearing on the matter is scheduled for March 3.
CFPB: A Longstanding Target
Established by Congress in the aftermath of the 2008 financial crisis under the Dodd-Frank Act, the CFPB was designed to protect consumers and enforce financial regulations. The agency is legally required to fulfill 87 congressional mandates, including operating a consumer complaint office accessible via a website and toll-free phone number.
Under former Director Rohit Chopra, who was dismissed by President Trump, the CFPB took aggressive steps to safeguard consumers. These included lawsuits against payment app Zelle and its affiliated banks for failing to protect users from fraud, as well as legal action against Capital One for misleading advertising of a “high-yield” checking account that offered minimal interest.
Since its inception in 2011, the CFPB has returned over $21 billion to consumers through fee reimbursements, debt cancellations, and loan reductions.
Political Tensions and Leadership Changes
The recent turmoil at the CFPB coincides with President Trump’s nomination of Jonathan McKernan to replace Vought as the agency’s next director. Vought, a key figure in Project 2025 and former White House budget director, was appointed acting director just last week.
The CFPB has been a contentious entity since its creation, with many Republicans advocating for its dissolution. Critics, particularly in Wall Street and Silicon Valley, argue that the agency’s regulatory approach is overly stringent, particularly concerning banks, payment apps, and other financial services.
As part of the federal system, the CFPB is funded by the Federal Reserve, ensuring its operational independence. However, the ongoing legal and political battles highlight the agency’s precarious position in the current administration’s efforts to streamline government operations.
The judge’s intervention has provided temporary relief to CFPB employees, but the agency’s future remains uncertain as it navigates these challenges.
