Judge Blocks Trump Administration's Efforts To Dismantle The CFPB

U.S. District Court has granted a preliminary injunction to preserve the CFPB
The Consumer Financial Protection Bureau (CFPB) was ordered to be resurrected by Judge Amy Berman Jackson, who sided with the CFPB employee union that launched its complaint against acting director Russell Vought last month in the U.S. District Court For The District of Columbia. Approximately 143 to 173 employees were fired from the CFPB in February 2025, or just under 10% of their total staff.
The complaint, filed Feb. 9, by the National Treasury Employees Union and other groups representing current and former employees of the CFPB, claims the administration’s efforts to allegedly dismantle the CFPB in violation of the separation of powers between the branches of government. The case, National Treasury Employees Union v. Vought, also contains a series of declarations (some written pseudonymously) detailing a desire to strip the agency all the way down to “five men in a room.”
In a landmark decision, the U.S. District Court has granted a preliminary injunction to preserve the CFPB, blocking efforts by the current administration to dismantle the agency. Acting Director Russell Vought had previously issued a directive ordering all CFPB employees to cease work, suspended rulemaking, investigations, and supervisory activities, and initiated a sweeping reduction-in-force (RIF) intended to rapidly eliminate the agency.
However, those actions were determined by the court to exceed the executive branch's authority and undermine statutory mandates set by Congress following the 2008 financial crisis.
Per the judge's orders:
- Defendants, shall maintain and shall not delete, destroy, remove, or impair any data or other CFPB records covered by the Federal Records Act.
- Defendants shall reinstate all probationary and term employees terminated between February 10, 2025 and the date of this order,
- Defendants shall not terminate any CFPB employee, except for cause related to the individual employee’s performance or conduct; and defendants shall not issue any notice of reduction-in-force to any CFPB employee.
- Defendants shall not enforce the February 10, 2025 stop-work order or require employees to take administrative leave in furtherance of that order, and defendants shall not reinstitute or seek to achieve the outcome of a work stoppage, whether through a stop-work order, an order directing employees to take administrative leave, or any other means.
- Defendants shall rescind all notices of contract termination issued on or after February 11, 2025, and they may not reinitiate the wholesale cancellation of contracts.
The court's decision follows extensive testimony and evidence, highlighting the immediate and irreparable harm these actions posed to both the CFPB's workforce and its mandated consumer protection functions. Judge Amy Berman Jackson noted that the abrupt halt in CFPB activities represented a significant violation of legislative intent, citing extensive evidence presented by plaintiffs, including the National Treasury Employees Union, the National Consumer Law Center, and the NAACP, among others.
This judicial intervention aligns with earlier concerns explored in NMP coverage, such as "CFPB Or Not CFPB," which speculated on the impact of undermining the bureau’s operational integrity. Additionally, as previously outlined in "Mass Firings At CFPB Imminent, Filing Says," substantial staff reductions had already begun, exacerbating uncertainty within the bureau and across regulated industries.
Critics of the CFPB's funding mechanism, which draws from Federal Reserve allocations rather than direct congressional appropriations, have argued for increased oversight and restructuring. However, the court emphasized the importance of preserving the agency's ability to fulfill its mandated responsibilities, including supervision, rulemaking, enforcement, and consumer advocacy.
The injunction temporarily ensures the continuation of the CFPB's operations, but significant questions remain regarding the agency's future authority and structure, creating uncertainty across the mortgage industry.