New CFPB leadership agrees to hold off on mass firings while lawsuit proceeds
Government lawyers representing the acting director of the Consumer Finance Protection Bureau reached an agreement during a court conference Friday to temporarily hold off on firing CFPB employees en masse while a lawsuit challenging the dismantling of the agency makes its way through court.
The consent order blocks the CFPB from firing employees for reasons unrelated to their work performance or conduct, and prevents the Trump administration from trying to redirect funding away from the agency tasked with protecting consumers.
The agreement also prevents the Trump administration from destroying or altering sensitive records maintained by the CFPB.
U.S. District Judge Amy Berman Jackson said she will consider issuing a longer-term preliminary injunction during a court hearing on March 3.
The ruling came after the CFPB had fired its probationary workers as part of the Trump administration's government-wide layoffs, with much of the remaining staff expecting to be fired next.
A group of federal unions that is suing the Trump administration over its dismantling of the agency alleged in a court filing Thursday that Russell Vought, newly installed as acting director, planned to purge over 95% of the agency's workforce as soon as Friday.
The plaintiffs who brought the lawsuit asked Berman to impose a temporary order to block the dismantling the CFPB, which they argue could have sweeping consequences for American consumers.
The firings, part of President Donald Trump's campaign pledge to slash the federal government, would gut the 1,700-employee consumer watchdog agency, according to three CFPB employees who spoke to ABC News on the condition that they not to be identified out of fear of retribution.
"All term employees were fired tonight, and it looks like the rest of us will be fired tomorrow but for cause rather than via a RIF [reduction in force] which means no severance I think," one agency lawyer wrote in a message to ABC News.
"3 of my 4 teammates were canned," another employee wrote. "Just me and my supervisor left, the only permanent employees."
Employees were told not to work or go into the agency's Washington, D.C., headquarters this week, and several employees said their credentials did not allow access into satellite offices in San Francisco, Chicago, New York and Atlanta on Thursday, two of the employees said.
The CFPB was created in 2011 as a response to the 2008 financial crisis which was caused by massive investments based on subprime or risky mortgages, causing a global financial crisis amid a lack of oversight.
The employees ABC News spoke with said the firings will leave all Americans more vulnerable.
"I’m worried about everybody. What about the people who use our complaints to get their loans straightened out or their bank accounts unfrozen? They’ve already tried calling the company and gotten nowhere," an employee wrote. "Who will help them now? Will the companies get bold and screw over their customers without our robust oversight?"
"It's going to be a nightmare," the employee said.
"I'm concerned for every consumer out there," another employee told ABC News. "There's a lot of fintech companies and I don't know what's going to happen if we don't have purview over that."
The employee said she was also concerned about X CEO Elon Musk, the head of the Department of Government Efficiency, having access to the CFPB's massive database, which contains information about companies that Musk's planned "X Money" online payment service would compete with. The agency would also be responsible for regulating the X Money platform.
The employee also said she was alarmed at the way CFPB employees were being characterized by the Trump administration.
"A lot of people are actively giving back and serving" the community, she said of her fellow CFPB employees. "Some donate from our paychecks -- donations for nonprofits, volunteering, donating, giving back to our community, fostering dogs, they're involved in a lot of causes. I work with remarkable people who never stop serving."
"Me personally, this was my dream job in college and I can't even believe i got in, it was so competitive," wrote the employee, who said she is in her fourth year at the agency after having worked in the private sector, so her pension will not vest. "It's the dream job, what's next? I'm too young to retire, I believe in the work we did, everyone I work with felt the same."
