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4w ago

Court Blocks Trump Administration’s Attempt to Gut Consumer Financial Protection Bureau

A federal appeals court reinstates an injunction halting the planned layoffs of 90% of CFPB staff, citing risks of operational failure and statutory violations.

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Supporters of the Consumer Financial Protection Bureau rally after Acting Consumer Financial Protection Bureau Director Russell Vought told all of the agency's staff to stay away from the office and do no work, outside the CFPB in Washington, U.S., February 10, 2025. REUTERS/Craig Hudson/File Photo
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Overview

  • The U.S. Court of Appeals for the D.C. Circuit restored a lower court’s order preventing mass layoffs at the CFPB, ensuring the agency retains its workforce while litigation continues.
  • The Trump administration planned to fire approximately 1,400 CFPB employees, leaving only 200 staff members, but courts have repeatedly intervened to block the reductions.
  • Internal emails from CFPB officials warn that such drastic layoffs would cripple critical functions, including technical systems and legal compliance, rendering the agency nonfunctional.
  • The appeals court ruled that no further layoffs can proceed until oral arguments on May 16, emphasizing the need for a detailed assessment of how statutory duties would be maintained.
  • The legal battle highlights broader tensions over executive authority, congressional intent, and the future of consumer financial protections created after the 2008 financial crisis.