Judge Orders CFPB Official To Testify On Agency’s Operations

A top Consumer Financial Protection Bureau official was ordered to testify in court about the Trump administration’s plans to gut the agency and whether it is still handling consumer complaints and other congressionally mandated tasks.

Judge Amy Berman Jackson of the US District Court for the District of Columbia at a Monday hearing was skeptical of government claims that the near-total shuttering of the CFPB by acting Director Russell Vought was the normal process during presidential transitions.

She was responding in part to declarations from Adam Martinez, the CFPB’s chief operating officer, made to the court that the agency’s consumer response and other units were still functioning despite the shutdown moves. The CFPB submitted his sworn statements in litigation brought by the National Treasury Employees Union, the National Consumer Law Center, the NAACP, and others challenging Vought’s stop-work orders. The NTEU represents many bureau employees.

Declarations submitted by the plaintiffs directly contradicted Martinez’s statements that the agency was carrying out its mandatory functions, such as answering and transmitting consumer complaints.

“We can’t have edicts issued with people’s fingers crossed behind their backs,” Jackson said at the hearing.

Martinez will have to appear for an evidentiary hearing on March 10 at 10 a.m.

The plaintiffs will also be required to provide their own witnesses who can discuss whether the CFPB’s complaint response team, student loan ombudsman’s office, and natural disaster response unit—all of which were mandated by the 2010 Dodd-Frank Act—are still operating, Jackson said at the hearing.

The judge also ordered that a consent agreement between the plaintiffs and the government blocking the CFPB from mass terminations of employees and destruction of data would remain in place until Jackson rules on a preliminary injunction the union and its co-plaintiffs requested.

Jackson said the CFPB under Vought has put pretty much the entire agency’s workforce on administrative leave and ordered them not to work. He also fired all probationary employees, she noted.

While the government argued that a preliminary injunction stopping them from reshaping the CFPB would be tantamount to court control, Jackson said an order stopping further action may be necessary to ensure the agency still exists when she makes a final ruling.

“What we’re talking about with interim oversight is to make sure it hasn’t been choked out of existence before I get to rule,” Jackson said.

A side agreement between the CFPB and the plaintiffs that prevented the agency from canceling key contracts was set to expire after the hearing. Jackson ordered the two sides to either come to an agreement on preserving that deal or provide instructions for a way for the judge to narrow it.

In a separate case brought by the city of Baltimore, a Maryland federal judge on Feb. 28 extended a temporary restraining order blocking the CFPB from sending its funds back to the Federal Reserve or the Treasury Department.

‘Choked Out of Existence’

Jackson used the Monday hearing to probe whether she should impose a preliminary injunction that would prevent Vought from essentially liquidating the CFPB.

The union said in an amended complaint filed Feb. 13 that Vought planned to fire as much as 95% of the CFPB’s staff and destroy the data the agency stored. The parties agreed to put that move on hold while Jackson weights a preliminary injunction.

Established in response to the 2007-08 financial crisis, the CFPB is charged with monitoring the mortgage, credit card, credit reporting, and other consumer financial markets for potential harms to customers. The agency had around 1,750 employees at the end of September, according to its fiscal 2024 financial report.

The Trump administration has fired around 150 CFPB employees as of Monday.

Liam Holland, a Justice Department attorney representing the CFPB, said that applying a preliminary injunction would tie the Trump administration’s hands and essentially put the CFPB in a court-managed receivership.

The relief plaintiffs were seeking wasn’t related to a discrete agency action—a requirement to challenge agency moves under the Administrative Procedure Act. “The action wasn’t discrete,” Jackson said.

The judge had questions for Deepak Gupta, the founding principal of Gupta Wessler LLP and counsel for the plaintiffs, about standing and the relief the NTEU and its co-plaintiffs are seeking.

Gupta said his clients are seeking modest relief. They want to stop Vought from firing CFPB staff en masse but take no issue with firing employees for cause. And they want to make sure the CFPB is carrying out its statutorily mandated duties, such as supervision and consumer response.

Vought and the Trump administration have talked about turning the CFPB into a five-man operation working out of an office in the Treasury Department, Gupta said.

“All those statements were in fact made,” Gupta said. “They’re not denying that.”

The plaintiffs are also represented by Public Citizen Litigation Group.

The case is NTEU v. Vought, D.D.C., No. 1:25-cv-00381, Hearing 3/3/25.