(Barron's) - A federal judge has ordered a halt to mass layoffs at the Consumer Financial Protection Bureau, where the Trump administration had been moving ahead with a plan to eliminate nearly 90% of the workforce.
A federal judge has ordered a halt to mass layoffs at the Consumer Financial Protection Bureau, where the Trump administration had been moving ahead with a plan to eliminate nearly 90% of the workforce.
Friday morning, Judge Amy Berman Jackson of the D.C. District Court said she was worried that the administration’s plan for a mass reduction in force, or RIF, violated her March order blocking the shutdown of the bureau and ordering the reinstatement of fired workers.
That order, which also required the administration to preserve the CFPB’s records, came amid the court’s consideration of a lawsuit filed by an employees’ union and other groups seeking to preserve the bureau itself, which Republicans have sought to disempower since its founding in the aftermath of the 2008 financial crisis.
Friday’s hearing came in response to a fast-moving plan led by a DOGE operative to eliminate almost all of the CFPB’s workforce, amounting to a “functional work stoppage” that ran afoul of an earlier court order blocking the administration from making cuts at the agency without undertaking a “particularized assessment” and determining that the changes wouldn’t interfere with the remaining employees performance of their duties.
“It is unfathomable that cutting the bureau’s staff by 90% in just 24 hours, with no notice to people to prepare for that elimination, would not ‘interfere with the performance’ of its statutory duties,” the plaintiffs argued in a Thursday filing asking the court to block the latest planned layoffs.
One CFPB staffer, who submitted testimony to the court under the pseudonym “Alex Doe” out of fear of retaliation, described a tense scene at the bureau as DOGE member Gavin Kliger, described as managing the RIF initiative, pressured CFPB personnel to race to distribute the layoff notices by Thursday.
“He kept the team up for 36 hours straight to ensure that the notices would go out yesterday (April 17),” Alex Doe says in a court filing. “Gavin was screaming at people he did not believe were working fast enough to ensure they could go out on this compressed timeline, calling them incompetent.”
The court will revisit the case on April 28, when Jackson has scheduled an evidentiary hearing. The CFPB didn’t immediately respond to a request for comment on today’s decision.
New narrow focus. Mark Paoletta, general counsel at the Office of Management and Budget, outlined a new and narrower focus for the bureau this week in a memo a Wall Street Journal reporter posted to X.
In that memo, Paoletta said the bureau would decrease supervisory exams by 50%, scale back its oversight over nonbank financial institutions, and shift from fining bad actors in the industry to instead “focus on redressing tangible harm by getting money back directly to consumers.”
The memo also listed several areas the CFPB will “deprioritize,” including potential misconduct involving student loans, medical debt, and digital payments.
Doreen Greenwald, president of the National Treasury Employees Union, one of the groups that is leading the lawsuit to save the CFPB, called this morning’s ruling halting the layoffs a “vindication for NTEU and its members, who wholeheartedly contend that the administration’s abrupt and chaotic RIF process does not serve the American people and is a deep violation of the rights of CFPB employees.”
By Kenneth Corbin
April 18, 2025
