A federal judge has temporarily blocked the Trump administration’s sweeping plan to lay off nearly 1,500 employees—about 88% of the workforce—at the Consumer Financial Protection Bureau (CFPB), an agency created in the wake of the 2008 financial crisis to protect Americans from unfair financial practices.
To address the failures that led to the Great Recession, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010, which formally established the CFPB. The agency officially opened its doors on July 21, 2011. Its creation consolidated consumer protection responsibilities that had been scattered among seven different federal agencies into one, with the goal of increasing accountability and ensuring consumers would not again be exposed to the kinds of abuses that fueled the financial crisis.
The CFPB is an independent U.S. government agency dedicated to protecting consumers from unfair, deceptive, or abusive practices by banks, lenders, and other financial institutions. Its core functions include:
- Enforcing federal consumer financial laws
- Supervising financial companies for compliance
- Writing rules to prevent unfair practices
- Taking consumer complaints and helping resolve disputes
- Promoting financial education
- Monitoring financial markets for emerging risks to consumers.
The CFPB’s jurisdiction covers a wide range of financial products and services, including mortgages, credit cards, student loans, payday loans, debt collection, and credit reporting.
The Trump administration initiated a Reduction in Force (RIF) that would shrink the CFPB from roughly 1,700 employees to just over 200. Departments critical to the agency’s oversight functions, such as enforcement and supervision, were slated for cuts of up to 90%, with some divisions reduced to a single staff member. Employees were informed that their access to agency systems would be cut off by April 18 and that their federal service would end by June 16 unless they qualified for other positions.
CFPB leadership argued that the agency could fulfill its statutory duties with a much smaller staff. According to court filings, the agency planned to focus on remediating consumer complaints and addressing actual fraud, while scaling back enforcement actions and deprioritizing oversight of student loans, medical debt, and digital transactions.
District Judge Amy Berman Jackson intervened, expressing concern that the administration’s rapid implementation of layoffs might violate her previous injunction. That injunction required any terminations to be based on individualized assessments of employee necessity to the agency’s mission, not broad, sweeping cuts.
Judge Jackson noted that the RIF notices may have been issued in defiance of her court order. On April 18, Judge Jackson ordered an immediate halt to the layoffs and scheduled an evidentiary hearing for April 28. She demanded that top officials—including those from the Office of Management and Budget and the Department of Government Efficiency—be prepared to testify under oath and provide all relevant communications regarding the layoffs.
