Office of Management and Budget Director and acting Consumer Financial Protection Bureau Director Russell Vought. Vought had terminated scores of bureau employees, only to have those firings blocked by a federal judge. An appeals court said the firings could continue but maintained a block on mass firings.
Bloomberg News
An appeals court panel sided in part with the Trump administration by allowing job cuts to resume at the Consumer Financial Protection Bureau, but upheld other aspects of an order that barred the agency from mass firings.
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On Friday evening, a three-judge panel of the U.S. Court of Appeals for the District of Columbia issued a partial stay of a preliminary injunction that had prohibited the agency from issuing reductions in force. The panel narrowed the injunction issued on March 28 by U.S. District Court Judge Amy Berman Jackson in allowing the CFPB to terminate employees whom it has determined are unnecessary to the performance of the agency's statutory duties.
Future firings of CFPB workers must be subject to an "assessment" of whether the workers are "unnecessary" to perform the bureau's legally mandated duties.
It is unclear how many employees could be terminated going forward. The CFPB's union sued Russell Vought, the bureau's acting director, in February to halt mass firings and the dismantling of the agency.
The appeals court panel was made up of two Trump appointees and an Obama appointee. The panel rejected the Trump administration's request to overturn Judge Jackson's preliminary injunction but stayed parts of the order while the government's appeal continues.
The two-page court order modified the injunction to allow the CFPB to conduct employee terminations and to issue stop-work orders, but only after the bureau conducts a "particularized assessment" that demonstrates its employee firings do not interfere with the bureau's legally mandated requirements. At the same time, the appeals court panel left in place restrictions on mass contract cancellations and requirements to preserve CFPB data.
Going forward, the CFPB cannot delete data or finalize the termination of any contract, and it must allow workers to continue to work remotely. In addition, certain functions must be maintained, including the CFPB's Office of Consumer Response, which maintains a toll-free hotline, website and database to take and respond to public complaints.
Cat Farman, the CFPB's union president, said that every employee does work that is necessary to protect consumers.
The ruling "is a reminder to this administration that the CFPB was created by Congress to protect American consumers and cannot be eliminated by executive order or an Elon Musk tweet," she said in a press release.
President Trump, Musk and Vought have each called for the CFPB to be eliminated. Vought, an author of Project 2025, the conservative blueprint for reshaping the federal government, holds two jobs in the Trump administration as both acting CFPB director and the director of the Office of Management and Budget.
The Department of Justice, in defending Vought, claimed that the preliminary injunction had forced the administration to maintain the status quo from the Biden administration, when the CFPB had 1,755 employees.
The Trump administration's firing of federal civil servants has raised constitutional questions about the extent of executive branch authority over personnel decisions. Since Jan. 20, 188 lawsuits have been filed against the Trump administration over the president's executive orders, according to litigation tracker Just Security.
The National Treasury Employees Union, joined by consumer groups, claimed in its lawsuit that Vought was trying to dismantle the CFPB without congressional authority.
During two days of evidentiary hearings last month, the district court found that Vought had engaged in a hurried effort to disable the CFPB by initially firing 200 probationary and term-limited employees without cause, cutting off the agency's funding, terminating all contracts and closing all of the offices including the bureau's Washington headquarters. Vought had planned a reduction in force that would cover the entire agency, but that plan was blocked by the preliminary injunction.
Kate Berry has covered the Consumer Financial Protection Bureau for American Banker since 2016. She joined the publication in 2006 covering mortgage... Read full bio
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