Judge maintains pause on mass CFPB firings to weigh whether Trump’s moves mean ‘impending doom’ for the agency
Judge maintains pause on mass CFPB firings to weigh whether Trump’s moves mean ‘impending doom’ for the agency
A federal judge Monday kept in place an order prohibiting mass firings at the Consumer Financial Protection Bureau while she sorts through conflicting claims about whether the Trump administration is still trying to shutter the independent agency.
U.S. District Judge Amy Berman Jackson issued the ruling in Washington, D.C., after the official who has been the CFPB’s chief operating officer since February 2023 said in a court filing Sunday that the administration was now “right sizing” the agency instead of trying to eliminate it completely.
That contrasts with court filings last week in which federal employees alleged that plans were underway by the Trump administration to reduce the financial watchdog agency’s workforce from the current roster of 1,700 to five.
Jackson said at a hearing Monday that the question before her was: “Is this impending doom, or is this not impending doom?”
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She asked a Justice Department lawyer, “You can’t blow it up, but why should you be able to starve it to death?”
Jackson also asked the government attorney, Liam Holland, whether “making sure consumers are protected from abusive practices” was “inconsistent with policy priorities of this administration.”
“I don’t know the answer to that question, your honor,” Holland replied. He portrayed the work stoppage orders as typical of turnover in presidential administrations but couldn’t provide an example when Jackson asked him for any historical corollary.
The lawyer for the CFPB employees, Deepak Gupta, said the case presented “a grave separation of powers” problem, because the administration was stopping the agency from carrying out its congressionally mandated and funded duties. Gupta said the administration’s goal is a “complete shutdown” of the agency.
Jackson said she was keeping her consent order in place to make sure the agency isn’t “choked out of its very own existence” before she rules on the request by unions, who are representing CFPB employees, for a preliminary injunction to block the agency from being stripped down.
The CFPB was an early target of Elon Musk’s Department of Government Efficiency. On Feb. 7, he posted “CFPB RIP” next to an emoji of a tombstone.
The top official who recently denied the agency was being shuttered, Chief Operating Officer Adam Martinez, acknowledged in a sworn declaration that he’d previously told employees that the CFPB was in “wind down mode” and facing “closure,” but he said that position began to change soon after Russell Vought was named acting director.
“Rather than a closure of the agency, Acting Director Vought’s new leadership has focused on running a substantially more streamlined and efficient bureau, refocusing its priorities, and ‘right sizing’ the agency,” he said in his declaration.
The plaintiffs noted that Vought, who is also director of the White House Office of Management and Budget, was the person who issued a stop work order to all CFPB employees on Feb. 10.
Martinez also maintained that some offices in the agency that had been closed were now back up and running, including “work related to compliance with the agency’s critical statutory responsibilities in the area of the Office of Consumer Response. Thus, as of February 27, 2025, members of the Escalated Case Management team, for example, are working.”
But the plaintiffs’ countered with a sworn declaration Sunday from a member of that team who said Martinez’s assertion was “false.”
“No member of the Escalated Case Management has performed any work since at least the February 10th stop-work order. Neither I, nor any member of the Escalated Case Management team, was asked (or authorized) to work on February 27th, or any date before or after that. To confirm my understanding, I contacted each member of the Escalated Case Management team, all of whom confirmed that they remained unauthorized to work. I also checked my email inbox, as well as the shared team inbox, and neither contains any directive or authorization for the Escalated Case Management team to resume working,” said the staffer, who used the pseudonym Emory Doe “because I fear retaliation.”
Another staffer, Matthew Pfaff, said in a declaration that Martinez had sent out an email to some executives on Feb. 27 that “statutorily required work and/or work required by law are authorized” to resume but that he hadn’t responded to questions about which programs.
Yet another staffer, identified only as Greer Doe, said in a separate declaration that workers have “extreme anxiety” about complying with Martinez’s email since Vought’s stop work order was never rescinded. They’re scared they “might be terminated for insubordination” if they do any work, wrote Doe, who also appeared skeptical that Martinez’s email was on the level.
“I interpret COO Martinez’s email as a somewhat transparent effort—in advance of a hearing in this Court—to create the appearance that statutorily required work is taking place across the Bureau when in fact it is not,” Doe wrote.
The judge said she would hold another hearing on March 10 and directed Martinez to appear as a witness. She also told the plaintiffs she expects testimony from witnesses with “personal knowledge” about the current state of operations at the agency.
Chloe Atkins reports for the NBC News Investigative Unit, based in New York. She frequently covers crime and courts.
Julia Jester is a producer for NBC News based in Washington, D.C.
Lawrence Hurley is a senior Supreme Court reporter for NBC News.
Dareh Gregorian is a politics reporter for NBC News.
© 2025 NBCUniversal Media, LLC
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A federal judge wants to hear directly from one of the top officials at the Consumer Finance Protection Bureau to learn if the Trump administration is unlawfully gutting the agency or just trying to streamline it.
U.S. District Judge Amy Berman Jackson — who expressed concern the CFPB might be “choked out of its very existence” — said she plans to hold a hearing next Monday to get testimony from CFPB Chief Operating Officer Adam Martinez and others about the state of the agency tasked with protecting American consumers.
During a lengthy hearing Monday, Jackson grew frustrated with a lack of clear answers from either side about the current state of the CFPB. Lawyers with the Department of Justice argued the relief requested by the federal unions who brought the lawsuit amounted to putting the CFPB into receivership, while the plaintiffs argued the Trump administration was causing irreparable harm by slowly starving the agency.
“According to the plaintiff, the sky is falling. According to the defendant, if I issue the order, the sky will be falling,” Jackson remarked.
Jackson is considering issuing a preliminary injunction to block the dismantling of the CFPB but added she might consider additional relief if the plaintiffs can demonstrate that the government’s actions are causing irreparable harm.
“I think what we’re talking about is interim oversight to make sure that it hasn’t been choked out of its very existence before I get to rule on the merits,” she said.
In a sworn court filing last week, Martinez argued the changes at the CFPB — which has operated under a stop work order for the last month — are simply a “common practice at the beginning of a new administration.” Jackson raised skepticism to the idea that what’s happening at the CFPB is business as usual.
“One of the big defenses of all this is that this is normal, that this is what happens when the new team comes to town, and I’m just not sure that’s true at all, at least not since I’ve been here,” she remarked. “Are you telling me that … when President Reagan took over from President Carter — on top of freezing regulations and enforcement and litigation — fired all provisional employees, shut the building, stopped all work and said the funding should stop?”
Lawyers with the Department of Justice insisted the Trump administration is trying to improve the CFPB, not destroy it.
“You can’t blow it up, but why should you be able to starve it to death?” Jackson asked.
“Acting Director [Russell] Vought wants to have a more streamlined and efficient bureau, not to blow it up,” responded a DOJ attorney.
Elon Musk, however, wrote “RIP CFPB” in a post on X on Feb. 7, the same day workers received termination notices.
The CFPB is an independent agency established by Congress after the 2008 financial crisis under the landmark Dodd-Frank Act. It’s a consumer watchdog aimed at protecting American households from unfair and deceptive practices across the financial services industry.
Its oversight applies to everything from mortgages to credit cards to bank fees to student loans to data collection. By law, the CFPB has the rare ability to issue new rules and to impose fines against companies who break them.
Since its establishment in 2011 through last June, the CFPB said it has clawed back $20.7 billion for American consumers.
ABC News’ Elizabeth Schulze contributed to this report.
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Trump administration, Musk’s DOGE plan to fire nearly all CFPB staff and wind down agency, employees say
The Consumer Financial Protection Bureau’s Trump-appointed leadership plans to fire nearly all its 1,700 employees while “winding down” the agency, according to testimony from employees.
In a trove of statements released late Thursday, federal employees said that the mass layoff was discussed in meetings they attended this month with senior CFPB leaders and members of Elon Musk’s so-called Department of Government Efficiency.
“My team was directed to assist with terminating the vast majority of CFPB employees as quickly as possible,” said an employee identified as Alex Doe, a pseudonym used out of fear of retaliation.
Doe said the plan from CFPB leaders and DOGE was to cut the bureau’s workforce in three phases. It would first eliminate probationary and term employees, then carry out a wave of about 1,200 layoffs, leaving a skeleton crew of a few hundred workers.
“Finally, the Bureau would ‘reduce altogether’ within 60-90 days by terminating most of its remaining staff,” Doe said.
The workers’ testimony comes at a crucial time for the CFPB, the agency created to protect consumers after the 2008 financial crisis caused by irresponsible lending. Since DOGE operatives first arrived at the CFPB this month, the bureau has shuttered its Washington headquarters, initiated the first round of layoffs and told those who remain to stop nearly all work.
The department has also reversed course on several cases where it accused financial firms including Capital One
of ripping off customers, dismissing at least four cases Thursday involving billions of dollars in alleged consumer harm.
The filings containing the employee statements were made in the case started by a CFPB union, which led to a judge suspending acting Director Russell Vought’s moves to shutter the bureau. After the CFPB fired about 200 probationary and term employees, the agency’s actions were put on hold until a March 3 hearing.
The documents show an apparent disconnect between some of the external messaging from Vought and the behind-the-scenes activity at the bureau.
In a motion filed Monday in the case, Vought pushed back against the idea that he planned to eliminate the CFPB.
“The predicate to running a ‘more streamlined and efficient bureau’ is that there will continue to be a CFPB,” he wrote.
But the Trump administration’s plan was to take the CFPB down to the barest minimum staffing required under law: Just five CFPB employees would remain, either in a stand-alone office or folded into another regulatory body, the workers testified.
In meetings between Feb. 18 and Feb. 25, “staff were told by Senior Executives that the CFPB would be eliminated except for the five statutorily mandated positions,” said another current CFPB employee, this one identified as Drew Doe.
“One Senior Executive said that CFPB will become a ‘room at Treasury, White House, or Federal Reserve with five men and a phone in it,’” Doe said.
Another CFPB employee said that he or she attended a Feb. 13 meeting in which the bureau’s chief operating officer, Adam Martinez, stated that the agency was in “wind-down mode.”
The CFPB employees said that, if directed to by the court, they would provide their names and titles under seal.
The bureau has long been a target of Republicans and financial institutions, who have called it a rogue agency that exceeded its legal authority in punishing companies. More recently, Musk has taken up the cause; he posted on his X platform, “RIP CFPB,” earlier this month just as his DOGE operatives began their work.
In several instances in the testimony, senior CFPB staff appeared to defer to DOGE employees for critical matters.
For instance, DOGE worker Jordan Wick “specifically stated” that Musk’s ad hoc group wanted a massive round of layoffs by Feb. 14.
“The Bureau intended to comply and fire the vast majority of remaining employees on February 14th,” Alex Doe said. “The only reason it did not do so is because of this Court’s order.”
In other instances, DOGE workers asked CFPB staff about how deeply they could cut operations while adhering to statutory requirements in areas like consumer response, per testimony from CFPB worker Matthew Pfaff.
Despite gaining full access to CFPB systems and data on Feb. 7, the DOGE employees haven’t yet completed the cybersecurity and privacy training required by the agency, the employees testified.
While Musk and Vought have openly advocated for the termination of the CFPB, only Congress can truly shutter the agency, which was created after lawmakers passed the 2010 Dodd-Frank Act.
Vought’s moves appear to allow him to claim the CFPB still exists, while sidelining its role by drastically curtailing its ability to supervise companies and respond to complaints.
CFPB employees question whether a handful of employees could credibly fulfill the dozens of statutory requirements of the agency, which include responding to millions of consumer complaints filed via web and phone lines, as well as maintaining advocacy offices for military veterans and senior citizens.
On Thursday, Jonathan McKernan, President Donald Trump’s pick to take over at the CFPB for Vought, told lawmakers including Sen. Elizabeth Warren, the Massachusetts Democrat credited with spurring the agency’s creation, that he would “fully and faithfully” enforce laws related to the CFPB’s mission.
McKernan added that if confirmed by the Senate, he would “rightsize” the CFPB, as well as “refocus it” and “make it accountable.”
Noting that Vought, who is also head of the Office of Management and Budget, has canceled the lease on the agency’s headquarters, Sen. Jack Reed, D.-R.I., told McKernan that he was in a “very difficult position.”
“You do not appear to have much presidential support or OMB support, and I have this sinking feeling that you’re departing Liverpool on the Titanic,” Reed said. “Good luck.”
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