## CFPB Hit with Mass Layoff Notices, Sparking Legal Battle and Political Outcry
The Consumer Financial Protection Bureau (CFPB) is reportedly sending out mass layoff notices, potentially affecting around 1,500 employees across various core functions. The move, initiated by CFPB Acting Director Russell Vought, is framed as a restructuring effort to better align with the agency’s priorities and mission. Affected employees will reportedly have their access to CFPB systems cut off after Friday and will be placed on administrative leave until their official termination date, according to a notice reviewed by *The Verge*.
This action appears to fly in the face of a previous court order designed to prevent the Trump administration from gutting the agency. The order, issued in March, prohibited the termination of CFPB employees except for performance or conduct-related cause and barred the issuance of reduction-in-force (RIF) notices. While an appeals court later partially stayed that portion of the injunction, it stipulated that any RIF must be based on a “particularized assessment” determining the necessity of the cut for the agency’s statutory duties.
*Fox Business* reported that the sweeping job cuts will affect approximately 1,500 workers. Further fueling concerns, CFPB Chief Legal Officer Mark Paoletta sent a notice outlining a shift in agency priorities, emphasizing a reduction in enforcement and supervision activities that could be handled by states. This redirection of resources and rescinding of previous enforcement priorities has raised concerns about the CFPB’s future direction and its commitment to consumer protection.
The National Treasury Employees Union (NTEU), which originally filed the complaint to halt the agency’s downsizing, has responded with a motion demanding the government explain how these mass terminations comply with the preliminary injunction. The filing argues that the sheer scale and speed of the cuts, potentially reducing entire offices to a single person or eliminating them entirely, makes it “unfathomable” that the agency could have conducted a “particularized assessment” for each employee in the short timeframe allowed.
Senator Elizabeth Warren (D-MA), a key architect of the CFPB, has strongly condemned the layoffs, calling the agency’s “dismantling” “yet another assault on consumers and our democracy by this lawless Administration.” She vowed to “fight back with everything we’ve got.”
The situation remains fluid, with the court expected to consider the NTEU’s motion and further legal challenges likely. The outcome will significantly impact the future of the CFPB and its ability to protect consumers in the financial marketplace.