CFPB layoffs spark legal clash amid court orders

The Consumer Financial Protection Bureau (CFPB) has begun issuing mass layoff notices despite a court order intended to block broad cuts, escalating a legal showdown over the agency’s future. According to the Verge, CFPB acting director Russell Vought informed employees that they were subject to a reduction-in-force and would lose system access after Friday. Fox Business reports that approximately 1,500 employees—nearly the agency’s entire staff—are affected..

In March, a federal judge barred the Trump administration from firing CFPB employees without cause or issuing RIF notices. While a partial appeals court stay loosened the restriction, it required “particularized assessments” showing any layoffs would not hinder statutory duties. Union attorneys argue the sweeping cuts clearly violate that standard, noting entire offices have been wiped out with no time for proper evaluations.

CFPB Chief Legal Officer Mark Paoletta announced Thursday that the Bureau would shift supervision and enforcement responsibilities to states, rescinding prior guidance, according to The Wall Street Journal. Sen. Elizabeth Warren (D-MA) denounced the moves as “yet another assault on consumers and our democracy.”