Federal judge blocks CFPB from laying off more employees

A federal judge in Washington, D.C., ordered that the Consumer Financial Protection Bureau cannot terminate more employees, providing a major reprieve to staff at the agency, who have been bracing for mass layoffs. More than 100 workers have already been fired this week.

Judge Amy Berman Jackson of the U.S. District Court in Washington also said the agency cannot “delete” or “remove” data held by the CFPB, while also saying the agency cannot transfer money from its reserve funds unless it’s for operational reasons.

Earlier this week, the CFPB, under acting Director Russell Vought, terminated many workers with tenures of up to four years — and staff had braced for scores more to be let go as early as Friday. Vought had also ordered staff to halt all work and closed the agency’s headquarters for the week.

The reductions are part of plans by the Trump administration — working with Elon Musk’s Department of Government Efficiency team — to significantly cut the federal workforce. Other actions so far have included firing about 1,300 employees, or 10% of the workforce, at the Centers for Disease Control and Prevention on Friday.

The order comes after members of the DOGE team were seen in the building, and were given access to key systems.

The CFPB’s former chief technologist had also warned that the Trump administration was going to delete key data with sensitive information.

The ruling from Judge Jackson, who was appointed by former President Obama, comes after the National Treasury Employees Union, which represents CFPB employees, filed a lawsuit to prevent the Trump administration from taking additional actions against the agency. It also filed another suit to prevent the administration from accessing the agency’s information.

The NTEU argues in its legal filing that CFPB’s order to stop work was unlawful, while also arguing that the administration’s access of its data violated the Privacy Act.

Judge Jackson set a hearing date for March 3.

CFPB has long been a target

Congress created the CFPB in the wake of the 2008 financial crisis as part of the bipartisan Dodd-Frank Act, and the bureau has many responsibilities it is legally obligated to perform.

An analysis by the Student Borrower Protection Center and the Consumer Federation of America lists 87 Congressional mandates that the CFPB is required to fulfill, including establishing an office that collects and monitors consumer complaints via a website and a toll-free telephone number.

The CFPB, under former Director Rohit Chopra, who was fired by President Trump, had taken aggressive actions on behalf of consumers, including suing the payment app Zelle and the big banks that operate it, saying they didn’t protect consumers from fraud. It also sued Capital One for advertising a ‘high-yield’ checking account that the agency argued paid close to zero in interest.

Since it became operational in 2011, it has returned more than $21 billion to consumers, including by returning some fees, canceling debt and reducing loans.

The turmoil at the CFPB come as President Trump nominated Jonathan McKernan to be its next director. He would replace Vought, an architect of Project 2025 and the White House budget director, who was named acting director late last week.

Many Republicans have wanted to get rid of the agency since its creation. It has also antagonized many executives on Wall Street and in Silicon Valley who say it is too heavy-handed with its regulation of banks, payment apps, and other financial products and services.

The bureau is part of the federal system and receives its funding from the Federal Reserve.