A federal judge has issued an order temporarily prohibiting the Trump Administration from imposing mass layoffs and budget cuts at the CFPB.
U.S. District Judge Amy Berman Jackson of the U.S. District Court of the District of Columbia has scheduled a March 3 hearing in the suit filed by the National Treasury Employees Union, the National Consumer Law Center, the NAACP, the Virginia Poverty Law Center, Pastor Eva Steege and the CFPB Employee Association.
In the suit, the groups ask the court to order the CFPB to resume all activities it is required to perform under federal law, asserting a violation of the Administrative Procedure Act and a non-statutory right to seek to enjoin and have declared unlawful agency action that is ultra vires (beyond the agency’s legal power or authority)
At the hearing, Judge Jackson will consider the groups’ motion for a preliminary injunction extending her order until the case is concluded. Until the resolution of that motion, Jackson’s order, which was based on an agreement of the parties, directs the agency not to “delete, destroy, remove, or impair any data or other CFPB records covered by the Federal Records Act” except as allowed under federal law.
She continued, “This means that defendants shall not delete or remove agency data from any database or information system controlled by, or stored on behalf of, the Consumer Financial Protection Bureau (CFPB), and the term ‘agency data’ includes any data or CFPB records stored on the CFPB’s premises, on physical media, on a cloud server, or otherwise.”
In addition, she prohibited the CFPB from terminating any employee, except for cause, and ordered the bureau not to issue any notice of reduction-in-force to any CFPB employee. Most agency employees currently are on “administrative leave.”
Finally, Jackson prohibited the CFPB from returning any money from the bureau’s reserve fund to the Federal Reserve. There had been reports that Acting Director Russell Vought had planned to return funds to the CFPB and not ask for any additional funds from the agency. That could effectively shut down the CFPB, since the agency is funded by the Fed.
In their suit, the groups alleged that Vought had instructed agency staff not to perform any work and not to come into the office. They also said that Vought had closed the agency’s headquarters and had taken steps to cancel the lease on the buildings. They added that they believe that Vought intends to return the agency’s operating reserves to the Fed.
The plaintiffs also contend that Vought has cancelled $100 million of contracts with companies and fired 70 probationary employees.