Trump Moves to Fire 88% of CFPB Staff In Violation of Court Orders
If the downsizing is successful, the agency will be left with just 200 staff members while it deprioritizes oversight of student loans, medical debt, and major financial institutions.
WASHINGTON, D.C. — The Trump administration has moved to fire more than 1,500 employees at the Consumer Financial Protection Bureau (CFPB), an unprecedented attempt to dismantle the agency created in the aftermath of the 2008 financial crisis. The move comes despite federal court orders prohibiting mass terminations at the bureau.
According to reports first published by Fox Business, 1,500 of the agency’s 1,700 employees received “Reduction in Force” notices, which placed them on administrative leave effective Friday and terminated their employment within 60 days.
The action appears to defy a March 28 preliminary injunction issued to prevent the agency from being unilaterally dismantled. The injunction halted all firings at the CFPB after internal communications revealed the administration’s intention to dismantle the agency.
That order was partially modified on April 11 by a three-judge panel of the D.C. Circuit Court of Appeals, which allowed limited firings based on “particularized assessments” of whether an employee is necessary to fulfill the agency’s statutory duties.
While the court stayed provisions of the order that required blanket reinstatement of fired employees and prohibited new terminations or notices of reduction-in-force, the court maintained the prohibition on broad enforcement of the February 10 stop-work order. Legal experts have warned that failure to seek further clarification or court approval before continuing reductions could place the agency in contempt of court.
Another court order on April 18 issued by U.S. District Judge Amy Berman Jackson stated that the reduction in force announced by the Trump administration “is not happening today.” She added that cutting off employees’ access to agency systems would also not proceed.
However, the Trump administration is attempting to justify the firings based on the April 11 D.C. Circuit Court of Appeals ruling that allowed RIFs based on “particularized assessments” of whether each employee was necessary to fulfill the CFPB’s statutory duties.
In response, declarations submitted by union representatives allege that the administration is violating even that narrowed standard. According to court filings, the CFPB sent termination notices to “all or virtually all” employees in at least 10 divisions that perform Congressionally mandated functions—including the Office of Servicemember Affairs, Office of Older Americans, Office of Fair Lending, Office of Community Affairs, and others.
Even employees managing the bureau’s internal data storage infrastructure—vital to CFPB operations—were marked for termination, raising concerns about data maintenance and legal compliance. Only a handful of personnel, such as division heads or exempt supervisory staff, were spared from the cuts.
Former CFPB officials condemned the administration’s move as a threat to financial stability and an attack on working families.
“We are watching a surge in financial fraud, as big banks and so-called fintechs target people and take their money,” said Eric Halperin, former CFPB enforcement director. “Instead of fighting against fraud and for working people, Donald Trump and Russ Vought have fired hundreds of law enforcement officials and are letting corporate criminals off the hook.”
Lorelei Salas, former supervision director at the bureau, said Trump and Vought had “brazenly defied a court’s order because they care more about the bottom line of their billionaire benefactors than they do about the American people or the law.”
A memo circulated internally by Chief Legal Officer Mark Paoletta confirmed that the agency will scale back its supervision and enforcement activities. According to the Wall Street Journal, this includes deprioritizing oversight of student loans, medical debt, and peer-to-peer lending.
According to the Student Borrower Protection Center, since Vought assumed control of the CFPB, the agency has reportedly halted core functions mandated by Congress.
Over the last two months, the CFPB has not examined a single large financial institution or non-bank lender for compliance with consumer protection laws. It has not announced any enforcement actions or delivered any monetary relief to consumers—departing from a record that has returned more than $21 billion to American families.
In early February, Vought issued a stop-work order suspending pending enforcement actions and barring new investigations. As a result, enforcement staff have been sidelined. Historically, the CFPB has returned $4.24 million per day to consumers. Since Vought took over, it has returned none.
The agency has also failed to ensure restitution for harmed consumers, including $100 million owed to borrowers defrauded by Navient and millions to students misled by the company Prehired, which has reportedly relaunched under a new name.
Meanwhile, under Vought’s leadership, the CFPB has actively dismissed 11 enforcement cases—eight involving repeat offenders—and issued what former officials call “corporate pardons” worth more than $3 billion. It has built a backlog of over 16,000 consumer complaints and reversed a consent order against a mortgage lender accused of redlining Black communities in Chicago.
The CFPB has also reportedly opened sensitive internal data systems to individuals associated with Elon Musk’s DOGE team without conducting background checks or security vetting. In another controversial move, the agency announced it would no longer enforce key provisions of the Payday Lending Rule. It had also signaled plans to reverse a rule projected to save Americans $10 billion per year in credit card late fees.
Critics say the administration’s actions amount to a coordinated effort to dismantle a critical consumer watchdog agency from within.
“Trump’s illegal and shocking efforts to dismantle the CFPB make it clear: Trump will Make Corporate Crime Great Again,” said Mike Pierce, executive director of the Student Borrower Protection Center. “It’s a shocking betrayal. Trump proves that Candidate Trump was lying when he said he’d fight for working people.”
As the legal battle intensifies, the D.C. Circuit Court has ordered an expedited schedule for resolving the appeal. The CFPB’s brief is due April 25, the plaintiffs’ opposition is due May 9, and the agency’s reply is due May 13. Oral arguments are scheduled for May 16 at 2 p.m.