Trump’s Plans to Shut Down CFPB, Delete Data Halted by Judge (1)

A federal judge in Washington put a temporary hold on the Trump administration’s plans to cull the Consumer Financial Protection Bureau’s workforce and effectively shutter the agency.

Judge Amy Berman Jackson of the US District Court for the District of Columbia on Friday applied a preliminary injunction blocking the CFPB from firing workers and deleting data.

The ruling also requires the CFPB to restore any contracts necessary to complete legally required tasks.

Jackson found that arguments from the CFPB and acting head Russell Vought that the agency was performing its statutorily mandated functions, such as operating its consumer response unit and various offices, were belied by the agency’s conduct.

The only reason the agency exists in any form is because the plaintiffs made it to the courthouse just hours before the Trump administration planned to fully close the CFPB, she said.

“Absent an injunction freezing the status quo—preserving the agency’s data, its operational capacity, and its workforce—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,” Jackson wrote.

Jackson ordered the CFPB to rehire probationary and term employees it fired under Vought and blocked the agency from carrying out a reduction-in-force. She also lifted a Feb. 10 stop-work order, required the CFPB to restore its consumer complaint system, and directed the agency to provide space and tools for employees to perform their jobs.

She also asked the plaintiffs to inform the court by March 31 why they are no longer pursuing a request to block the CFPB from transferring its reserve funds to the Federal Reserve or the Treasury Department. A federal judge in Baltimore this month denied a preliminary injunction in a case filed by the city of Baltimore seeking to block those actions.

The CFPB is required to submit an update on the status of its Washington headquarters. Vought moved to cancel the lease and has gone so far as to remove the CFPB’s name from the building.

Jackson’s decision is a win for the National Treasury Employees Union, which represents many CFPB workers, and other plaintiffs including the NAACP and the National Consumer Law Center that sued to prevent Vought from destroying the agency.

“Today’s victory blocks the unprecedented plan to dismantle the CFPB—an agency that Congress created to protect Americans’ financial security,” Deepak Gupta, the founding principal of Gupta Wessler LLP and attorney for the plaintiffs, said in a statement. “This ruling upholds the Constitution’s separation of powers and preserves the Bureau’s vital work.”

The CFPB’s union also applauded the ruling

“I’m thrilled to see the judge throw Russell Vought’s Project 2025 playbook in the garbage where it belongs,” CFPB Union President Cat Farman said in a statement. “CFPB workers are eager to get back to work serving the American people and protecting their hard-earned paychecks from Wall Street greed.”

The CFPB didn’t immediately respond to a request for comment.

Shutdown Moves

Vought on Feb. 10 ordered CFPB staff to stop all work and closed its offices. The agency also canceled more than $100 million in contracts days into his tenure.

CFPB leaders intended to fire up to 95% of the workforce—including a reduction-in-force in February targeting units with roughly 1,200 of the agency’s 1,700 employees—and delete critical data, according to declarations and internal CFPB emails the union filed. The CFPB agreed to hold off on those moves ahead of Jackson’s ruling but put most staff members on administrative leave in the meantime.

The CFPB argued that applying a preliminary injunction blocking staff cuts and other changes would be equivalent to putting the agency in judicial receivership.

But the CFPB was caught saying one thing and doing another on tasks Congress explicitly required the agency to undertake.

Declarations from CFPB Chief Operating Officer Adam Martinez attempted to show how the CFPB’s consumer response unit and other legally mandated operations were still running. Those statements were frequently inaccurate, incomplete, or “blatantly false,” current and former CFPB employees said in countering declarations filed by the union.

Jackson said in her ruling that she didn’t need to determine whether Martinez was lying in his initial declaration. His follow-up declaration, filed after CFPB employees pointed out inconsistencies, and his acknowledgment at March 10 and 11 evidentiary hearings that Vought and his team planned to shut down the CFPB were sufficient, she said.

“He had the demeanor of an abused wife brought to court by her husband to drop the charges,” Jackson wrote of Martinez.

The CFPB also started bringing employees back to conduct necessary operations as judicial scrutiny loomed, though those orders were met with confusion.

Jackson relayed her concerns at a March 3 hearing that the CFPB under Vought could take irreversible steps before she was able to make a final ruling on the union’s lawsuit.

“What we’re talking about with interim oversight is to make sure it hasn’t been choked out of existence before I get to rule,” Jackson said at the time.

‘Unreliable and Inconsistent’

The CFPB’s conduct throughout the course of the litigation was enough to convince Jackson that allowing Trump’s team to proceed with plans to effectively abolish the agency was far too risky, despite assurances that mandated work would continue.

“Defendants’ initial effort to persuade the Court in their opposition that employees were hard at work on their statutory duties even after they were ordered to stand down on February 10 has been shown to be unreliable and inconsistent with the agency’s own contemporaneous records, and the defendants’ eleventh hour attempt to suggest immediately before the hearing that the stop work order was not really a stop work order at all was so disingenuous that the Court is left with little confidence that the defense can be trusted to tell the truth about anything,” she wrote.

More than 200 House Democrats filed an amicus brief backing the plaintiffs and describing the CFPB’s mandated work under the 2010 Dodd-Frank Act.

The preliminary injunction comes as the CFPB prepares for new leadership.

The Senate Banking Committee on March 6 approved Trump’s pick for full-time CFPB director, Jonathan McKernan, on a party-line vote, advancing it to the full chamber. McKernan told the panel he intends to “right-size” the agency, but he vowed to continue its supervisory and enforcement work.

Gupta Wessler LLP and Public Citizen Litigation Group represent the union and its co-plaintiffs.

The case is NTEU v. Vought, D.D.C., No. 1:25-cv-00381, 3/28/25.