Bloomberg News
A federal judge on Friday granted a preliminary injunction to the Consumer Financial Protection Bureau’s union, stating that the court “must act” to block the Trump administration from dismantling the agency.
U.S. District Judge Amy Berman Jackson granted a preliminary injunction that maintains the agency’s existence, reinstates and preserves the agency’s contracts, work force, data, and operational capacity.
The National Treasury Employees Union, which sued the CFPB in February, argued that they would be irreparably harmed if an injunction was not issued. Berman Jackson, of the U.S. District Court for the District of Columbia, said the union is likely to succeed on the merits of their Administrative Procedure Act claims and that the injunction serves the public interest.
“There is no act of Congress that empowers the President to shut down the CFPB in his discretion,” Berman Jackson wrote in the 112-page order. “This is precisely the sort of situation preliminary injunctions were designed to address. If the defendants are not enjoined, they will eliminate the agency before the Court has the opportunity to decide whether the law permits them to do it, and as the defendants’ own witness warned, the harm will be irreparable.”
The order is a yet another blow to the Trump administration’s efforts to dismantle federal agencies and fire employees. The administration faces
The CFPB’s acting Director Russell Vought, the judge said, fully engaged in “a hurried effort to dismantle and disable the agency entirely” by firing all probationary and term-limited employees without cause, cutting off funding, terminating contracts, closing all of the offices, and implementing a reduction in force that would cover the entire agency.”
The CFPB’s dismantling was interrupted only because the union sued Vought “and obtained the Court’s intervention on the day the overwhelming majority of the employees were going to be fired,” Berman Jackson wrote.
“These actions were taken in complete disregard for the decision Congress made 15 years ago, which was spurred by the devastating financial crisis of 2008 and embodied in the United States Code, that the agency must exist and that it must perform specific functions to protect the borrowing public,” she wrote.
Berman Jackson did not mince words in describing the actions of Vought and President Trump.
“There is no mystery about what is going on as the President … Elon Musk and Russell Vought have made their actions and intentions clear,” she wrote. “Indeed, only two days after the agency’s Legal Officer — who like the police chief in Casablanca who was ‘shocked, shocked’ to find gambling going on — professed to be surprised that some employees were not working, the White House posted a message on its ‘Work for You Again’ webpage boasting: ‘President Trump ordered the Consumer Financial Protection Bureau — the brainchild of Elizabeth Warren, which funneled cash to left-wing advocacy groups — to halt operations.'”
A core dispute in
The Justice Department, in defending Vought’s actions, tried to claim that a stop-work order did not constitute a final action by the agency and therefore could not be challenged under the APA, which governs the process by which federal agencies develop and issue regulations.
But the judge wrote that court testimony and the chronology of events suggest the CFPB’s leaders engaged in “a charade for the Court’s benefit,” by authorizing the resumption of some work and reactivating some contracts.
She said that Vought’s actions to dismantle and shut down the CFPB “are unconstitutional because they exceed the executive’s authority and usurp the legislature’s authority.”
“Absent an injunction freezing the status quo — preserving the agency’s data, its operational capacity, and its workforce — there is a substantial risk that the defendants will complete the destruction of the agency completely in violation of law well before the Court can rule on the merits, and it will be impossible to rebuild,” the judge wrote.
The CFPB did not respond to a request for comment
Deepak Gupta, who represented the NTEU, said he was heartened by the decision and looks forward to continuing to press the union’s case in court.
“When we filed this lawsuit, the Trump Administration had paralyzed the Consumer Financial Protection Bureau’s work and was within hours of firing nearly its entire staff,” said Gupta, the founding principal at Gupta Wessler LLP. “This victory blocks the unprecedented plan to dismantle the CFPB—an agency that Congress created to protect Americans’ financial security. The ruling upholds the Constitution’s separation of powers and preserves the Bureau’s vital work.”
Cat Farman, president of the CFPB’s union, said she was thrilled to see the judge “throw Russell Vought’s Project 2025 playbook in the garbage where it belongs.”
Vought is one of the authors of Project 2025, a political initiative to reshape and consolidate executive power in favor of right-wing policies.
The union was joined in its lawsuit by the National Consumer Law Center, National Association for the Advancement of Colored People, Virginia Poverty Law Center, Rev. Eva Steege, and the CFPB Employee Association.
“Today’s ruling is an undeniable win-win for working people,” Farman said. “CFPB workers are eager to get back to work serving the American people and protecting their hard-earned paychecks from Wall Street greed.”
The injunction will remain in effect even after Jonathan McKernan is expected to be confirmed as the CFPB’s permanent director once the Senate votes on his nomination by the end of April.
Under the preliminary injunction, the CFPB cannot issue any notice of a reduction-in-force or terminate any CFPB employee, except for cause related to performance or conduct. All probationary and term employees must be reinstated, including the Private Student Loan Ombudsman Julia Barnard, the order states.
In addition, the CFPB must maintain records and not “delete, destroy, remove, or impair any data,” covered by the Federal Records Act. The agency also is required to ensure that employees can perform their statutorily-mandated functions by providing them with either fully-equipped office space, or permission to work remotely. Contracts that were terminated have to be rescinded and the bureau cannot reinitiate a wholesale cancellation of contracts.
The CFPB also is required to ensure that the Office of Consumer Response continues to maintain a toll-free telephone number, website, and database for consumer complaints.
The order by Berman Jackson began by listing three quotations showing the intent of the Trump administration: Elon Musk’s Feb. 7 post on X stating “CFPB RIP”; Vought’s Feb. 8 post on X saying “the CFPB has been a woke and weaponized agency against disfavored industries and individuals for a long time. This must end.”; and President Donald Trump’s remarks about the CFPB, telling a reporter: “That was a very important thing to get rid of.”
The motion for preliminary injunction, Berman Jackson said, “boils down to one question: should the Court take action to preserve the Consumer Financial Protection Bureau now, before the case concerning its fate has been resolved? … the answer is an overwhelming yes: the Court can and must act.”
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,” she wrote.
The CFPB is the only federal agency authorized to supervise the nation’s largest banks for compliance with consumer financial protection laws. It also supervises nonbanks of all sizes in certain markets including mortgage companies, payday lenders, larger nonbank participants, credit reporting agencies, digital payment apps and debt collectors.
After Berman Jackson issued a consent order on Feb. 14, the CFPB’s efforts to dismantle the agency “continued as if nothing had changed,” she wrote.
Employees remained on administrative leave, and were not performing their work duties. The bureau’s home page was deleted at the request of Vought, and a reduction in force was still being planned. Moreover, on Feb. 19, in an interview with CBS News, President Trump said that his administration had “virtually shut down the out-of-control CFPB.”
Additional actions came at a rapid-fire pace, including moving the CFPB out of its headquarters in 30 days, cutting off travel cards and cancelling more contracts.
The judge made further references in the order to attempt by the leadership to intimidate employees and obfuscate about the planned mass firings, while claiming employees were performing legally-required functions.
“The evidence showed that emails purporting to get things up and running again could not be taken on face value, either, as the employees found out that being reactivated on paper did not mean they could actually do the work,” she wrote.
While the judge stopped short of calling the CFPB’s leaders liars, she noted that Adam Martinez, the bureau’s chief operating officer and a key witness in the case, “appeared anguished by both the demise of the agency and by his being cast in the role of agency spokesman.”
In court testimony, Berman Jackson wrote that Martinez “had the demeanor of an abused wife brought to court by her husband to drop the charges.”
She also said that “Martinez’s testimony established that he has no idea what the leadership of the agency is planning beyond firing all of the employees.”
The Justice Department claimed that an injunction wasn’t needed because CFPB employees had been instructed to perform mandated duties.
But Berman Jackson countered that Vought and the CFPB “overstepped their statutory and constitutional authority and usurped the power of the members of Congress, who were democratically elected by the people in every state in the union.”