Judge agrees to immediately halt further CFPB firings

A federal judge on Friday agreed to temporarily block the Trump administration from firing more employees at the Consumer Financial Protection Bureau. 

U.S. District Judge Amy Berman Jackson ordered the CFPB and acting CFPB Director Russell Vought to “not terminate any CFPB employee, except for cause related to the specific employee’s performance or conduct.”

In addition, Berman Jackson, of the U.S. District Court for the District of Columbia, ordered the Trump administration to not issue any notice of reduction-in-force “to any CFPB employee.” She also blocked the defendants from deleting, destroying, removing or impairing “any data or other CFPB records covered by the Federal Records Act.”

The ruling was a win for the National Treasury Employees Union and other groups who asked Berman Jackson to prevent the potential mass firings of CFPB employees — who by law are entitled to a 60-day notification of job loss — as well as the protection of 12 years of data that plaintiffs’ lawyers said were at risk of being deleted. 

If that data were to be deleted, it would be “irretrievable,” warned Deepak Gupta, founding principal of the law firm Gupta Wessler and one of the attorneys representing the plaintiffs. Berman Jackson scheduled a hearing for March 3 to consider a preliminary injunction. 

The hearing took place one day after the NTEU, consumer groups and the suit’s other plaintiffs requested a temporary restraining order against Vought. The groups argue that Vought was illegally appointed to the role and that his actions to dismantle the CFPB have usurped the role of Congress.

Roughly 10% of the CFPB’s workforce of 1,755 has been terminated this week, according to American Banker’s reporting. While the order stops the Trump administration from taking new actions, it does not address past firings or whether any CFPB data has been transferred to a private entity or sold. 

In addition, the order also prohibits the CFPB from transferring money from the agency’s reserve funds, other than “to satisfy the ordinary operating obligations of the CFPB.” It also requires that the Trump administration’s leadership “relinquish control or ownership of the CFPB’s reserve funds [and not] grant control or ownership of the CFPB’s reserve funds to any other entity.” The bureau was ordered to not “return any money from the CFPB’s reserve funds to the Federal Reserve or the Department of Treasury.”

At Friday’s hearing, Gupta, one of the attorneys who filed a lawsuit Thursday on behalf of the NTEU and other employee and consumer groups, asked for Berman Jackson, an appointee of former President Obama, to act quickly. 

“I’m asking that they don’t fire the entire agency tonight,” Gupta said. “I don’t want to leave the courthouse without some assurance that the mass layoff is not going to happen and then become a fait accompli.”

On Thursday night, the Trump administration fired more than 100 CFPB term employees who were hired during the Biden administration. Term employees have contracts of more than one year but less than four years and are supposed to have civil service protections. On Wednesday, Vought fired more than 70 probationary employees who had been hired by the CFPB in the past two years. Many of them were enforcement attorneys.

Friday’s order does not apply to CFPB workers who have already been let go.

During the court hearing, Brad Rosenberg, a special counsel at the Department of Justice, objected to the request for a preliminary injunction. 

“We don’t think any preliminary relief is appropriate at this stage because we don’t think the plaintiffs are likely to succeed on the merits,” he said.

Rosenberg said the government agreed in a separate case on Thursday not to transfer CFPB’s funds to other government entities as part of a deal with the city of Baltimore. Maryland’s largest city sued Vought on Wednesday, arguing that his recent decision not to use the bureau’s statutory funding mechanism will leave the CFPB “dead in the water” and limit the agency’s ability to protect consumers.

Gupta said the risks to CFPB data are far-reaching and that Trump advisor Elon Musk’s so-called Department of Government Efficiency recently gained access to all data involving bank and payment contracts, the CFPB’s consumer complaint database and personal financial information on the bureau’s employees.

All federal agencies and financial institutions are covered by a range of laws that protect government data and private information. The protections are more stringent for federal agencies and employees, and for supervisory information. Some statutes have criminal penalties for failing to comply. 

Ten million people have filed complaints with the CFPB since the agency was established in 2011. Their personal information, including addresses, phone numbers and the complaints themselves, are in the hands of Musk, who could use the information on competitors for personal gain or to harm the market, potentially hurting consumers, Gupta said. 

Vought has been working with Musk’s team to cut the federal workforce, purportedly to pay for an extension of Trump’s signature 2017 tax cuts. DOGE was established last month through one of Trump’s first executive orders, which renamed the existing U.S. Digital Service as the DOGE U.S. Service.

The CFPB did not respond Thursday or Friday to a request for comment. The bureau’s public relations office has not responded to American Banker’s media requests since Feb. 3.