CNN
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A congressional watchdog agency is investigating President Donald Trump’s efforts to dismantle the Consumer Financial Protection Bureau, CNN has learned, responding to Senate Democrats who are also demanding that the agency’s Trump-appointed acting director turn over information about how the bureau can meet its statutory obligations amid attempts to lay off nearly 90% of its staff.
Courts have also pushed back on the move, and an appeals court said Monday the administration could not engage in any mass layoffs at the bureau while it takes a closer look at a lawsuit challenging Trump’s efforts to dismantle it.
The CFPB was created by Congress in 2010 in the wake of the 2008 financial crisis. It offers various mechanisms for consumers to seek help in addressing predatory or fraudulent business practices, while conducting oversight of the financial services industry. The bureau has long been in the crosshairs of Republicans, who argue it’s exceeded its congressional mandate and that it replicates regulatory work already being done by other federal agencies.
Trump promised to dismantle it from the 2024 campaign trail.
Earlier this month, Massachusetts Sen. Elizabeth Warren – who spearheaded the agency’s creation and is now the top Democrat on the Senate Banking Committee – joined New Jersey Sen. Andy Kim in asking the US Government Accountability Office to probe the administration’s hobbling of the agency.
The GAO, according to a letter obtained by CNN, has indicated it is moving forward with that review. In the meantime, 40 Senate Democrats have asked acting Director Russ Vought to provide a “detailed accounting” of how the agency will carry out the more 80 tasks assigned to it by Congress given his plans for a barebones staff.
“In short, it is not possible for the CFPB to perform all of its statutorily required functions with a staff of 200 people left after slashing almost 90% of the agency,” they wrote.
CNN has reached out to CFPB for comment.
A federal judge was also planning to scrutinize Tuesday the administration’s most recent efforts to whittle down the agency, having frozen the layoffs while she did, until the DC US Circuit Court of Appeals issued its own order Monday afternoon putting such mass terminations on hold while it reviewed the ongoing legal challenge. The lawsuit was filed by unions and various consumer advocacy groups in February as the Trump-appointed leadership was first trying to hollow it out.
The DC Circuit previously gave the administration some leeway in to drastically shrink the CFPB’s workforce, pausing parts of a prior preliminary injunction issued by US District Judge Amy Berman Jackson that halted mass terminations and other sweeping actions that undermine CFPB’s work. The DC Circuit panel in mid-April gave the okay for large-scale layoffs as long as a “particularized assessment” showed that such terminations would not undermine the bureau’s ability to do the CFPB work mandated by Congress. Less than a week later, the agency’s political leadership rolled out plans to fire nearly 1,500 of its 1,700 employees.
The administration initially tried to execute the layoffs even more quickly, the legal challengers alleged in court filings Saturday, pointing to internal documents suggesting an unsuccessful push to complete the terminations by the Sunday after the Friday night appellate order. The unions also have put forward declarations from CFPB employees who say the very small number of employees the administration has retained in the various agency offices required by law don’t even have the skill sets or capacity to carry out those statutory functions.
The administration has contended in court filings that its layoff plans have complied with the law and with the court orders in the case.
The DC Circuit will hear arguments on May 16 as it considers whether the sweeping terminations can go forward.
