CFPB Attempts to Lay Off 90% of Staff, Although Judge Temporarily Halts Efforts For Now

Last week, multiple outlets reported that the Consumer Financial Protection Bureau (CFPB) was planning to cut roughly 1,500 employees—or 90 percent of its staff—leaving only approximately 200 staffers in place. The following day, the attempt was temporarily halted by U.S. District Judge Amy Berman Jackson who felt the layoffs would violate previous court decisions.

At a hearing last week, the judge stopped the CFPB from cutting off employees’ computer access until she holds a hearing later this month. “It’s not going to happen in the meantime,” she said, according to The Hill. “We’re not going to disburse 1,483 people into the universe and have them be unable to communicate with the agency anymore until we have determined whether that is lawful or not.”

The employee cuts come as a continuation of the Trump administration’s significant efforts to reshape the federal government. The Hill also noted that Russell Vought, acting CFPB Director, said in a notice that the cuts are “necessary to restructure the Bureau’s operations to better reflect the agency’s priorities and mission.”

The CFPB was created after the 2008 financial crisis, and since opening its doors it has been highly criticized by conservatives and businesses who argued that the agency’s investigations are too hostile toward banks and lenders. Elon Musk made the Bureau a top target of his Department of Government Efficiency.

Although an appeals court partially paused Jackson’s order, the CFPB is still prohibited from conducting a reduction in force without a “particularized assessment” showing that the cut employees are not necessary to continue the Bureau’s statutory obligations.

The Trump administration has argued that it followed that procedure when determining layoffs, but the National Treasury Employees Union doubted such claims due to the fast speed and broad scope of the mass firings.

At the follow-up hearing, the plaintiffs are expected to demand the Bureau to supply internal documents showing how the employee cuts were determined.