Judge Halts CFPB Dismantling Campaign by Trump-Appointed Leaders

A federal judge issued a decisive order on Friday, halting the efforts of the Consumer Financial Protection Bureau (CFPB) leadership appointed by President Donald Trump to dismantle the agency. Judge Amy Berman Jackson sided with the CFPB employee union, which had filed a lawsuit against acting director Russell Vought last month to prevent the mass layoff of nearly all the regulator's staff. The involvement of operatives from Elon Musk's Department of Government Efficiency in these firing efforts further complicated the situation.

Legal Victory for the CFPB

In her ruling, Judge Berman stated explicitly that "Defendants shall not terminate any CFPB employee, except for cause related to the individual employee's performance or conduct; and defendants shall not issue any notice of reduction-in-force to any CFPB employee." This order represents a significant legal victory for the agency and its employees, effectively preventing the immediate dismantling of the CFPB.

Wider Context of Resistance

This case is not an isolated incident. It exemplifies a broader pattern of federal judges pushing back against attempts by the Trump administration to lay off federal employees and undermine agencies deemed unfavorable. This ruling injects new life into the CFPB, the sole federal agency dedicated specifically to protecting consumers from nonbank financial entities.

Reinstatement and Operational Directives

Judge Berman's order extends beyond simply halting the layoffs. She mandates the reinstatement of all probationary and term employees who were fired after Vought assumed leadership at the CFPB. Additionally, she prohibits any deletion, destruction, or impairment of agency data, effectively safeguarding the CFPB's valuable information assets. Furthermore, Vought is ordered to rescind contract terminations previously undertaken.

Ensuring Functionality

Recognizing the importance of operational capacity, Judge Berman directed the CFPB to ensure its consumer complaint portal remains functional and that complaints are promptly addressed. She also emphasized the need for providing employees with adequate workspace, either fully equipped office space or permission to work remotely, to facilitate their statutory duties.

Accountability and Transparency

The order holds Vought accountable for compliance, requiring him to file a report by April 4 confirming adherence to all the directives outlined. Notably, Judge Berman explicitly states that the order applies to all CFPB leaders and "any other persons who are in active concert or participation with them," including personnel from the Department of Government Efficiency. This ensures that the efforts to undermine the CFPB are comprehensively addressed.

Censorship Prevention

In a separate 112-page opinion, Judge Berman delved into the rationale behind granting the union's request for a preliminary injunction. She highlighted the urgency of the situation, stating, "The Court cannot look away or the CFPB will be dissolved and dismantled completely in approximately thirty days, well before this lawsuit has come to its conclusion." The injunction serves as a crucial safeguard, preserving the agency's existence, contracts, workforce, data, and operational capacity until the case is resolved on its merits.