The Consumer Financial Protection Bureau (CFPB) has begun issuing widespread layoff notices, seemingly in violation of a court order that halted further layoffs after DOGE-related reductions. A notice obtained by The Verge, sent by CFPB Acting Director Russell Vought to an agency employee, states, "I regret to inform you that you are affected by a reduction in force (RIF) action. This RIF action is necessary to restructure the Bureau’s operations to better align with the agency’s priorities and mission." According to the notice, employees’ access to CFPB systems will be revoked following Friday, and they will be placed on administrative leave until their official termination dates.
Fox Business reports, via an unnamed source, that approximately 1,500 employees across key functions will receive RIF notices. On Thursday evening, CFPB Chief Legal Officer Mark Paoletta issued a notice regarding the agency’s supervision and enforcement priorities, indicating a reallocation of resources away from enforcement and supervision tasks that states could manage. This notice also nullified previous documents outlining enforcement and supervision priorities, as reported by The Wall Street Journal.
In March, a federal judge prohibited the Trump administration from terminating any CFPB employees unless justified by individual performance or conduct issues. Additionally, the judge forbade issuing any RIF notices to CFPB employees. However, an appeals court recently partially lifted this injunction, allowing RIFs deemed unnecessary to the agency’s statutory duties after a thorough assessment.
Late Thursday, the union that initially filed a complaint to prevent the agency’s downsizing requested a court order compelling the government to justify how the mass layoffs comply with the preliminary injunction. The union’s filing argues that entire offices, including those mandated by statute, face elimination or reduction to a single staff member. It is inconceivable, according to the union, that a 90 percent staff reduction in 24 hours with no prior warning would not hinder the agency’s ability to fulfill its statutory duties. Furthermore, they question the plausibility of the agency conducting an individualized assessment of each employee’s role within three-and-a-half business days.
Senator Elizabeth Warren (D-MA), a key figure in establishing the agency and the leading Democrat on the Senate Banking Committee, condemned the agency’s downsizing, describing it as "another assault on consumers and our democracy by this lawless Administration" and vowed to resist with full force.
Updated March 17th: Included the filing from the CFPB worker union and comments from Senator Elizabeth Warren.