Judge Blocks CFPB Layoffs Until April 28 Hearing

Nearly 1,500 employees were identified as part of a “reduction in force” effort that was quickly blocked as part of an ongoing case challenging changes at the bureau.

U.S. District Judge Amy Berman Jackson has blocked layoffs at the Consumer Financial Protection Bureau until an April 28 hearing in an ongoing case brought by the National Treasury Employees Union and other organizations.

Last week, the Trump administration announced a “reduction-in-force” initiative that would result in layoffs of more than 1,500 CFPB employees, Politico reports.

A notice to the employees from acting CFPB Director Russ Vought said the layoffs are “necessary to restructure the Bureau’s operations to better reflect the agency’s priorities and mission,” according to the article.

In March, Jackson blocked several actions that she said would “dismantle” the CFPB in a preliminary injunction in the union’s case, ACA International previously reported.

Before the layoffs were announced, the union challenged several actions taken by Vought under the Trump administration, including a stop-work order and the termination of bureau employees.

The CFPB was ordered to not enforce the Feb. 10, 2025, stop-work order, and must ensure the CFPB Office of Consumer Response continues to maintain a phone number, website and consumer complaint database.

CFPB Layoffs

Now, actions to cut approximately 90% of the bureau’s staff and stop their computer access are on hold, until the April 28 hearing, The Hill reports.

“It’s not going to happen in the meantime,” Jackson said, according to the article. “We’re not going to disburse 1,483 people into the universe and have them be unable to communicate with the agency anymore until we have determined whether that is lawful or not.”

The union said, in response to the layoffs, that they could violate Jackson’s previous order in the case.

“The Trump administration contends it followed that procedure and went line by line through the CFPB’s business units,” according to The Hill report. “The union, however, insists the broad scope and fast speed means no such assessment occurred, warning in a filing (last) Thursday that ‘entire offices, including statutorily mandated ones, have or soon will be either eliminated or reduced to a single person.’”

The Hill also reports that CFPB Chief Legal Officer Mark Paoletta said in a declaration to the court ahead of last week’s hearing that “the agency’s leadership determined that the CFPB should move forward with just 200 employees.”

The Trump administration has appealed the judge’s order blocking the layoffs, according to a report from Ballard Spahr LLP. The appeal says there is no basis for the order, according to the article.

“As defendants explained in their emergency motion, there is no basis under this Court’s Stay Order to allow plaintiffs or the district court to second-guess defendants’ determination that the employees subject to the reduction in force are unnecessary to the performance of defendants’ statutory duties—let alone to conduct an inquisition into the basis for that determination.”

Paoletta and Gavin Kliger of the Department of Government Efficiency will testify at Monday’s hearing, American Banker reports.

CFPB Director Nomination

Meanwhile, the Senate’s confirmation of Jonathan McKernan as CFPB director is pending. The Senate Banking Committee voted 13-11 to send his nomination to the full Senate for consideration.

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