Consumer Financial Protection Bureau Acting Director Russ Vought has planned a mass layoff of more than 95% of the agency’s employees “that may occur imminently,” the National Treasury Employees Union wrote Thursday in an amended complaint that asks a judge to block Vought’s orders.
Further, Vought has reportedly informed the General Services Administration that the CFPB will cancel the lease on its Washington headquarters, the union wrote.
Beyond that, the union asserted, Vought intends to return the CFPB’s operating reserves to the Federal Reserve. Vought wrote to the Fed on Saturday to indicate the bureau wouldn’t take any unappropriated funding next fiscal quarter – meaning the CFPB would operate on its reserve funding. Returning the reserves, the union said, “would eliminate” the agency’s “entire budget.”
A mass firing, if it were to occur, would be the third major workforce cut for the CFPB in recent days. Roughly 70 to 100 term employees at the bureau were laid off Thursday, NPR and Bloomberg Law reported, citing people with knowledge of the matter.
“The purpose of this memorandum is to notify you that your employment will be terminated effective at the close of business on February 13, 2025,” read a notice posted to X by a Punchbowl News reporter.
Term employees – those whose positions were for a set length of time, often two to four years – were the target of Thursday’s layoffs, NPR reported. The move was separate from a set of layoffs Tuesday affecting roughly 70 probationary employees – relatively new hires whose trial periods hadn’t ended.
Thursday’s firings affected fellows with two-year contracts and participants in the CFPB director’s “Financial Analyst” program, a two-year assignment for recent college graduates, Bloomberg Law reported.
The firings aimed to align with President Donald Trump’s “workforce optimization initiative,” an executive order enforced Tuesday, according to the memo posted on X.
The workers’ union, in its suit, argues it’s not just employees but the work itself that’s suffering – and consumers, by extension. The CFPB has “canceled nearly all contracts that underlie” the bureau’s consumer complaint function, the union said. That operation fields roughly 350,000 consumer complaints a month, the union said.
The hotline that consumers can call to submit complaints went offline, the union said, “despite Congress’s clear command that the CFPB ‘establish a single, toll-free telephone number’ for use in collecting complaints.” That violates the bureau’s mandate, the union argued. The CFPB also canceled the contract for contractors processing mailed-in complaints, the union said.
Further, the bureau’s escalated case management team, which fields time-sensitive matters such as foreclosures, is not working, per the stop-work order Vought issued Monday, the union said, calling the development “particularly devastating.”
“By suspending the statutorily mandated activities of the CFPB, [President Donald] Trump and Vought’s shutdown of the CFPB runs afoul of core constitutional separation of powers principles, Congress’s express statutory directive, and the Administrative Procedure Act,” the union wrote in its amended filing, which the NAACP and National Consumer Law Center, among others, joined as plaintiffs.
The union wants a judge “declare unlawful and set aside the defendants’ actions and intended further actions to dismantle the CFPB, including issuance of stop-work instructions, cancellation of contracts, declining and returning funding, reductions in force, firing of employees, and termination of the lease for its headquarters, as arbitrary, capricious [and] an abuse of discretion,” according to the complaint.
Further, the union argued, Vought was not legally appointed. Trump named Vought the CFPB’s acting director under the Federal Vacancies Reform Act, “which allow[s] for temporary appointments without the advice and consent of the Senate when the prior holder of a Senate-confirmed office ‘dies, resigns, or is otherwise unable to perform the functions and duties of the office,’” the union asserted.
Trump “fired the last Senate-confirmed Director, Rohit Chopra,” the union wrote. “Chopra did not die, he did not resign, and he was not unable to perform the functions and duties of the office. He continued to perform them until the day he was fired.”
The union contends the CFPB’s deputy director, Zixta Martinez, should be placed in charge of the bureau. Martinez was placed on administrative leave Tuesday.
The union’s lawsuit, filed in the U.S. District Court for the District of Columbia, is not the only legal action pending from events at the CFPB this week. In neighboring Maryland, the city of Baltimore and Economic Action Fund Maryland sued the CFPB on Wednesday, claiming Vought’s efforts to defund the agency stand as an attempt to “do by fiat what opponents of the CFPB were unable to do in Congress or the courts.”
A pair of trade groups in 2018 sued the CFPB, alleging its funding structure was unconstitutional because it received appropriations through the Fed rather than Congress. The Supreme Court last May upheld the CFPB’s funding mechanism.
