The Consumer Financial Protection Bureau (CFPB or Bureau) is undergoing significant changes as the Trump administration implements sweeping layoffs just days after revising the Bureau’s regulatory priorities. According to reports, approximately 1,400-1,500 employees have received reduction-in-force notices, leaving the CFPB with just over 200 personnel to carry out its regulatory activities. This drastic reduction raises critical questions about the agency’s ability to effectively focus on its newly outlined priorities for 2025.
The layoffs affect the CFPB’s core functions, including the supervision of financial institutions and its enforcement arm. As discussed here, the Bureau sent a memo to staff on Wednesday announcing that it will refocus its efforts on addressing “tangible harm to consumers” by reallocating resources from enforcement and supervision activities that can be managed by state regulators. This shift aims to streamline the CFPB’s operations and reduce regulatory burdens on businesses. However, with only 200 employees remaining, the CFPB faces a daunting challenge in meeting its ambitious 2025 priorities. According to reports, entire offices have been reduced to a single employee, making it difficult to see how the Bureau will manage its workload.
It’s also unclear how this reduction-in-force will be viewed by Judge Amy Berman Jackson who is overseeing the union’s ongoing case against Acting Director Vought and the CFPB. As we discussed here, Judge Jackson had previously barred the CFPB from terminating any employees, except for cause. Her injunction, however, was partially stayed by the U.S. Court of Appeals for the District of Columbia Circuit. Specifically, the court stayed the prohibition on terminating employees “insofar as it prohibits the defendants from terminating or issuing a notice of reduction in force to employees deemed unnecessary after a particularized assessment.”
Yesterday, the plaintiffs filed an emergency motion requesting that the court issue an order to show cause why the defendants have not violated the preliminary injunction. In its motion, the union argues that “[i]t is unfathomable that cutting the Bureau’s staff by 90 percent in just 24 hours, with no notice to people to prepare for that elimination, would not ‘interfere with the performance’ of its statutory duties, to say nothing of the implausibility of the defendants having made a ‘particularized assessment’ of each employee’s role in the three-and-a-half business days since the court of appeals imposed that requirement.”
Hours later, the court granted the plaintiffs’ motion and ordered the CFPB to show cause why it has not violated the preliminary injunction. A hearing is scheduled today for 11 a.m. EST.
