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Federal judge prevents Trump administration from dismantling CFPB
Demonstrators raise signs at a rally to protest the closing of the Consumer Financial Protection Bureau last month in Washington, D.C.
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Jemal Countess
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Getty Images
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A federal judge on Friday blocked the Trump administration from dismantling the Consumer Financial Protection Bureau and ordered that all terminated employees be reinstated.
The temporary injunction from Judge Amy Berman Jackson at the U.S. District Court in Washington, D.C., also prevents the administration from firing any more CFPB workers or from deleting any of the agency's data or records, as part of a sweeping ruling to protect the agency.
"There is a substantial risk that the defendants will complete the destruction of the agency completely in violation of law well before the Court can rule on the merits, and it will be impossible to rebuild," Berman Jackson wrote in her order .
The order comes as a case proceeds in a lawsuit filed by the National Treasury Employees Union, which represents employees of the CFPB after the Trump administration effectively shuttered the agency last month.
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The administration along with Elon Musk's team — the Department of Government Efficiency — had closed the CFPB's headquarters, ordered employees to cease most work and terminated over 100 probationary and term employees.
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The judge has previously sided with UC scholars several times since June in halting Trump’s termination of science and health research funding. -
The overhaul shifts funds to transitional housing requiring work and addiction treatment. The administration says it promotes "self-sufficiency," but critics warn many will risk losing housing again.
Judge Berman Jackson has yet to issue a final order on the case.
Representatives of the Trump administration and the CFPB did not immediately respond to requests for comment.
Deepak Gupta, a lawyer representing the CFPB's union welcomed the temporary ruling.
"Today's victory blocks the unprecedented plan to dismantle the CFPB—an agency that Congress created to protect Americans' financial security. This ruling upholds the Constitution's separation of powers and preserves the Bureau's vital work," Gupta said in an email.
"We're heartened by the decision and look forward to continuing to press our case in court," he added.
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Berman Jackson has been skeptical of government efforts
Through the hearings so far, Judge Berman Jackson has appeared skeptical of the government's arguments, asking pointed questions to the attorneys representing the Trump administration.
Some work at CFPB has slowly resumed while the hearings were taking place, but Berman wrote on Friday that it was all "more likely a charade for the Court's benefit."
The Trump administration has made no secret of its ire for the bureau, which has long been unpopular with some Republicans and Wall Street and Silicon Valley executives who say it is too heavy-handed in its regulations.
The bureau was created by Congress as part of the Dodd-Frank Act, in the wake of the 2008 financial crisis. The CFPB is required to carry out a number of statutory requirements stipulated by Congress; some of the statutes predated Dodd-Frank and were unified under the CFPB's responsibility.
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But the game has changed: Congress voted to eliminate funding for public media across the country. Here at LAist that means a loss of $1.7 million in our budget every year. We want to assure you that despite growing threats to free press and free speech, LAist will remain a voice you know and trust. Speaking frankly, the amount of reader support we receive will help determine how strong of a newsroom we are going forward to cover the important news in our community.
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