FILE PHOTO: Office of Management and Budget (OMB) Acting Director Russell Vought testifies before House Budget Committee on 2020 Budget on Capitol Hill in Washington, U.S., March 12, 2019.
Yuri Gripas | Reuters
A federal judge on Friday ordered the Consumer Financial Protection Bureau‘s leadership, appointed by President Donald Trump, to halt its campaign to dismantle the agency.
In a filing, Judge Amy Berman Jackson sided with the CFPB employee union that sued acting director Russell Vought last month to prevent him from laying off nearly all the regulator’s staff. Operatives from Elon Musk’s Department of Government Efficiency have also been involved in efforts to fire employees.
“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,” Berman said.
The order is the latest example in which a federal judge has pushed back against moves by the Trump administration to lay off federal employees and hobble disfavored agencies. It breathes new life into the only federal agency tasked specifically with consumer protection of nonbank financial players, but one that the industry has accused of operating outside its authority under former director Rohit Chopra.
Berman ordered Vought to reinstate all probationary and term employees fired after Vought took over at the CFPB, said that he shouldn’t “delete, destroy, remove, or impair agency data,” and struck down Vought’s February stop-work order.
“To ensure that employees can perform their statutorily mandated functions, the defendants must provide them with either fully-equipped office space, or permission to work remotely” Berman wrote.
In the sweeping document, Berman also said that the CFPB needed to ensure its consumer complaint portal worked and it responded to those complaints; told the CFPB to reverse contract terminations undertaken by Vought, and ordered him to file a report by April 4 confirming compliance with the edicts.
She specifically said the order applied to all CFPB leaders as well as “any other persons who are in active concert or participation with them, such as personnel from the Department of Government Efficiency.”
A spokesperson for Vought didn’t immediately return an email seeking comment.
‘Cannot look away’
In a separate, 112-page opinion that cited Musk’s Feb. 7 social media post declaring “CFPB RIP,” Berman explained her rationale in granting the union’s request for a preliminary injunction.
“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 injunction “maintains the agency’s existence until this case has been resolved on the merits, reinstating and preserving the agency’s contracts, work force, data, and operational capacity, and protecting and facilitating the employees’ ability to perform statutorily required activities,” she wrote.