Judge orders bureau to reinstate fired employees

A federal judge has issued a ruling ordering the Consumer Financial Protection Bureau (CFPB) to halt its efforts to dismantle the agency under the leadership appointed by President Donald Trump. The judge, Amy Berman Jackson, sided with the CFPB employee union in a lawsuit against acting director Russell Vought, preventing him from laying off most of the agency’s staff. This ruling comes as a blow to the Trump administration’s attempts to reduce the agency’s workforce and limit its operations.

The judge’s order prohibits the termination of CFPB employees without cause related to performance or conduct, as well as the issuance of any notices of reduction in force. It also requires Vought to reinstate probationary and term employees who were fired after he assumed the role of acting director. Additionally, the order mandates that agency data be preserved, office space or remote work options be provided to employees, and contract terminations be reversed.

The ruling highlights the importance of the CFPB as the only federal agency dedicated to consumer protection in the nonbank financial sector. Despite criticisms from the industry about the agency operating beyond its authority under former director Rohit Chopra, the judge’s decision breathes new life into the agency’s mission.

In a separate opinion, Judge Berman cited Elon Musk’s social media post declaring “CFPB RIP” and emphasized the urgency of maintaining the agency’s existence. She explained that allowing the agency to be dissolved and dismantled would have irreversible consequences before the lawsuit could be resolved.

The ruling not only preserves the CFPB’s contracts, workforce, data, and operational capacity but also ensures that employees can continue to perform their statutory duties. It also requires compliance with a set of directives by a specified deadline, holding CFPB leaders and other involved parties accountable.

The decision serves as a significant setback for the Trump administration’s efforts to weaken the CFPB and underscores the importance of upholding consumer protection measures in the financial industry. The judge’s ruling reaffirms the agency’s role in safeguarding consumers and maintaining oversight in the nonbank financial sector.