U.S. District Judge Amy Berman Jackson stopped the administration’s effort, the latest development in a legal seesaw battle that has seen plans to dismantle or cut back the CFPB started and stopped several times. Last week, Jackson ruled that President Donald Trump could downsize the agency but not dismantle it altogether. She voiced concern with the Thursday move to cut 1,500 employees from the bureau, leaving just 200.
In response, she halted the move once again. A hearing for officials who worked on the reduction-in-force to explain their actions is scheduled for April 28, the Associated Press reported.
“I’m willing to resolve it quickly, but I’m not going to let this RIF go forward until I have,” Jackson said.
Mark Paoletta, the CFPB’s chief legal officer, argued that administration officials have spent weeks laying out “a much more limited vision for enforcement and supervision activities” with a “smaller, more efficient operation.”
He argued the bureau had “pushed well beyond the limits of the law,” including by undertaking “intrusive and wasteful fishing expeditions.”
Those in the CFPB have also alleged behavior bordering on abuse by Department of Government Efficiency personnel. A sworn statement from a CFPB employee claimed DOGE member Gavin Kliger was driving the people in charge of the RIF to the limit.
“He kept the team up for 36 hours straight to ensure that the notices would go out yesterday,” they said. “Gavin was screaming at people he did not believe were working fast enough to ensure they could go out on this compressed timeline, calling them incompetent.”
Jackson said she would require Kliger to testify at the April 28 hearing.
“We’re not going to decide what happened until we know what happened,” she said.
CONSUMER WATCHDOG AGENCY BEGINS SWEEPING LAYOFFS AND CHANGES IN OPERATIONS
The bureau was one of the earliest and most controversial targets of Elon Musk’s DOGE. Sen. Elizabeth Warren (D-MA) founded the bureau after the 2008 financial crisis to help consumers. Critics argued that it drifted from its original purpose, becoming an opaque agency that abused its authority, pursuing targets such as a community-focused financial lending company.
Acting CFPB director and Office of Management and Budget director Russell Vought took several measures to reduce the agency upon assuming the position, including halting investigations and layoffs. This triggered a lawsuit from the National Treasury Employees Union, which argued he and the Trump administration were violating the separation of powers clause of the Constitution by trying to shut it down.
