CNN
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A federal judge paused the Trump administration’s efforts to lay off nearly 1,500 of the 1,700 employees at the Consumer Financial Protection Bureau as she considers whether the mass firing violated a court order halting the dismantling of the agency.
Judge Amy Berman Jackson will scrutinize the layoffs with an evidentiary hearing on April 28, during which there would be witness testimony, she said at an emergency hearing called Friday morning. She is ordering the administration to turn over internal documents and communications about the firings to the unions and other groups that have sued the administration over its efforts to take apart the agency.
The mass layoff “is not going to happen in the meantime,” Jackson said in court.
The case is one of several where the Trump administration has been accused of violating court orders. Jackson said Friday she had “concerns” the new layoffs ran afoul of orders from her and a federal appeals court prohibiting mass terminations that would interfere with the ability of the agency, created by Congress in the wake of the 2008 financial crisis, to meet its statutory obligations.
The CFPB was an early target of the Trump administration’s downsizing efforts, but its undoing was largely blocked in federal court. Republicans have long wanted to close down the agency, whose creation was spearheaded by Elizabeth Warren, now a Democratic senator from Massachusetts.
The CFPB’s new leadership has been reviewing the agency’s activities and staffing since February, Mark Paoletta, the agency’s chief legal officer, said in a declaration Friday. Previously, the CFPB’s activities have “pushed well beyond the limits of the law” and the agency has “engaged in intrusive and wasteful fishing expeditions.”
“An approximately 200 person agency allows the Bureau to fulfill its statutory duties and better aligns with the new leadership’s priorities and management philosophy,” Paoletta said.
The legal challengers, however, submitted declarations Friday morning alleging that the layoff plans had been rushed and done without a “particularized” assessment of whether they would infringe on the agency’s statutory obligations, as required by an order last week from the DC US Circuit Court of Appeals.
A member of Elon Musk’s Department of Government Efficiency kept CFPB staffers working for 36 hours straight to send out mass layoff notices at the agency, screaming at those he thought weren’t working fast enough, according to a declaration from an agency employee, submitted anonymously for fear of retaliation.
Jackson indicated at the Friday’s hearing that the DOGE affiliate, Gavin Kliger, would need to be present at the April 28 hearing.
The declaration also claimed that CFPB employees raised to the agency’s Chief Operations Officer Adam Martinez concerns about compliance with the court order, “but they were told that all that mattered was the numbers.”
“The direction to ignore the concern came from Mark Paoletta, who said that the numbers based [Reduction In Force] should move forward, and that leadership would assume the risk,” the declaration said.
Paoletta, in his statement filed with the court, listed the agency’s various departments and how many employees were needed. For instance, the consumer response education division could function with 20 employees, rather than 149 workers. The enforcement division could operate with 50 workers, rather than 248 staffers. And the supervision division could fulfill its duties with 50 employees, rather than 487, and they could all work from the lower-cost Southeastern region.
Going forward, the agency will focus on “conciliation, correction, and remediation of harms subject to consumers’ complaints,” focus on “actual fraud” against consumers and on getting money back to them, rather than imposing penalties on companies, among other areas. And it will focus on the largest banks and depository institutions.
During Friday’s hearing, Deepak Gupta, an attorney for the unions, said that the layoffs the administration sought to conduct this week were larger than the ones it had tried to implement in February, before Jackson’s earlier interventions in efforts to hollow out the CFPB.
