On March 28, the Consumer Financial Protection Bureau (CFPB or Bureau) was ordered by the U.S. District Court for the District of Columbia to reinstate its employees and resume its operations. This decision comes after the CFPB allegedly attempted to shut down its activities, leading to the National Treasury Employees Union (NTEU) filing a lawsuit questioning the legality of the shutdown. The court held that the CFPB’s actions to halt its operations and terminate its employees were not consistent with its statutory obligations under Title X of Dodd-Frank. As a result, the court granted a preliminary injunction requiring the CFPB to reverse its shutdown efforts, reinstate its workforce, and continue performing its statutory duties. On March 29, the Bureau filed its notice of appeal of the preliminary injunction.
Procedural History
The impetus for the case commenced when the CFPB, under the direction of Acting Director Russell Vought, initiated a series of actions at the CFPB. These actions included issuing a “do no work” order via e-mail, canceling contracts, and terminating employees. The NTEU, representing the affected employees, filed a lawsuit challenging these actions as unlawful and inconsistent with the CFPB’s statutory obligations.
The court issued a consent temporary restraining order on February 14, temporarily halting any further reductions in force, terminations of contracts, or deletion of data. The court held two days of evidentiary hearings on the matter, during which key witnesses, including the CFPB’s Chief Operating Officer, Adam Martinez, testified.
The Preliminary Injunction
The court granted the plaintiffs’ motion and issued a preliminary injunction to maintain the agency’s existence until the case is resolved on the merits. A separate order was issued detailing the preliminary injunction requirements.
The order mandates the CFPB to:
- Maintain and not delete, destroy, remove, or impair any data or other CFPB records covered by the Federal Records Act.
- Reinstate all probationary and term employees terminated between February 10, 2025, and the date of the order.
- Not terminate any CFPB employee, except for cause related to the individual employee’s performance or conduct, and not issue any notice of reduction-in-force.
- Not enforce the February 10, 2025 stop-work order or require employees to take administrative leave in furtherance of that order.
- Provide employees with either fully-equipped office space or permission to work remotely with the necessary technological support.
- Ensure the CFPB Office of Consumer Response continues to maintain a toll-free telephone number, a website, and a database for the centralized collection of consumer complaints.
- Rescind all notices of contract termination issued on or after February 11, 2025, and not reinitiate the wholesale cancellation of contracts.
- File a report with the court by April 4, 2025, confirming compliance with the order.
We will continue to monitor the CFPB’s appeal, its activities and operations, and provide updates.