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In a closely watched case that could determine the posture of the Consumer Financial Protection Bureau (CFPB) during the second Trump administration, a judge overseeing a case brought by the National Treasury Employees Union (NTEU) against CFPB acting director Russell Vought could rein in actions to wind down the agency.
In the U.S. District Court for the District of Columbia, Judge Amy Berman Jackson heard testimony earlier this week from the bureau’s chief operating officer about the actions taken thus far by the U.S. DOGE Service to scale back the CFPB’s operations. Jackson is reportedly “leaning” toward issuing a preliminary injunction that would effectively pause a plan to wind down the agency’s operations.
Weighing an injunction
“I want to preserve an agency that could be revived, if necessary,” Jackson said on Tuesday, based on a report published by American Banker. “I don’t think we can have nothing.”
The decision came after two days of testimony from Adam Martinez, the COO of the CFPB. This prompted the judge to indicate that the administration’s wide-ranging plans for the bureau are still likely to include mass reductions in force (RIFs).
“A lot of evidence has been introduced that supports a decision that the same people who were sitting in a room and talking about RIFing are still sitting in a room and talking about RIFing,” she said, according to a report from technology news outlet The Verge.
Jackson has reportedly asked the government to halt additional layoffs while she weighs whether to impose a longer-term preliminary injunction on such activity. While cautioning that her thinking is not final, she indicated that she plans to make a decision by the end of this month.
Martinez’s testimony offered hints of an operational — if minimized — CFPB beginning to emerge. But additional testimony from “Alex Doe,” a direct report of Martinez’s who was granted anonymity to provide testimony due to fears of retaliation, said that things are more dire than they appear.
“Doe alleges they were put in charge of the team organizing mass firings and described several meetings between the RIF team and the Office of Personnel Management (OPM), which advised on how to terminate roughly 1,200 of the agency’s 1,700-person workforce in short order,” the Verge report explained.
Court guidance not followed?
In a meeting on Feb. 13 that Doe said he attended with Martinez, a DOGE staffer said he had repeatedly consulted with Vought, adding that they were both pushing for substantial RIF notices to be sent out the following day, Feb. 14. No explanation was given for the speed, Doe reportedly testified.
A memo that reportedly detailed the lengths to which CFPB employees would be laid off elicited a strong reaction from Doe.
“Seeing in black and white the number of people that were being fired, it was shocking and it was upsetting,” Doe testified, according to The Verge.
But after flagging the work for Martinez in the belief that he would pause further action while the court review was pending, a senior advisor to the COO instead ordered Doe to work faster to meet the administration’s RIF goals, he testified. Despite additional orders of pauses from the court, Doe said that this work was continuing.
Additionally, Matthew Pfaff, the chief of staff for the CFPB’s Office of Consumer Response, reportedly testified that the lack of progress on existing work has led to a severe backlog of consumer complaints and support tickets. Pfaff said this would take “weeks if not months” to fully process.
Will the bureau keep going?
While fully dismantling a congressionally approved government agency like the CFPB would require an act of Congress, a decision to halt the wind-down activities at the bureau would still constitute a blow to the White House’s broader deregulatory agenda.
In recent weeks, administration officials have stated that the CFPB will continue to operate. The White House has pointed to its nomination of Jonathan McKernan to serve as the new full-time CFPB director. During his Senate confirmation hearing, McKernan repeatedly emphasized a need for the agency to operate within its statutory authority.
CFPB opponents have routinely accused the bureau of operating beyond the authority that Congress originally vested in it through the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
