CFPB Slashed to the Bone, Threatening Financial Markets

[Passages]

The agency fired 1,500 workers on Thursday, which violates a court order and threatens a meltdown of mortgage markets and more.

by David Dayen
April 18, 2025

A mass firing at the Consumer Financial Protection Bureau on Thursday leaves the agency without sufficient staff to fulfill its statutory goals or even the priorities laid out by the agency’s acting chief legal officer a day earlier, according to employees and their attorneys. Plus, the dramatic action once again puts some of the markets CFPB oversees at risk of malfunctioning.

About 1,500 of the CFPB’s 1,700 employees began receiving termination notices on Thursday afternoon. One such notice, signed by acting director Russ Vought, deemed the reduction in force (RIF) “necessary to restructure the Bureau’s operations to better reflect the agency’s priorities and mission.” Though the separation won’t take effect until June 16, access to work systems will be cut off at close of business Friday, according to the letter. No advance notice was provided, at odds with federal labor law or the agency’s collective bargaining agreement.

Some of the fired employees had just been reinstated in the past few weeks, after a federal judge reversed layoffs of term and probationary employees.

The purge was an apparent exploitation of a loophole that an appeals court handed Vought and CFPB leadership last weekend. D.C. District Court judge Amy Berman Jackson had forbidden CFPB to fire employees or act to shut down the agency with a preliminary injunction. On appeal, the D.C. Circuit upheld part of the injunction but granted CFPB authority to fire workers or stop work, but only “after a particularized assessment” that workers are “unnecessary to the performance of the defendants’ statutory duties,” or that the stopped work “would not interfere with the performance of the defendants’ statutory duties.”
https://prospect.org/justice/cfpb-slashed-threatening-financial-markets-workers-fired-defying-judges/