WASHINGTON — A judge said in a ruling Friday that the Consumer Financial Protection Bureau could not terminate employees without cause, dealing a blow to President Donald Trump’s efforts to dismantle the agency.
The court order came in response to a lawsuit by the National Treasury Employees Union and the CFPB Employee Association, among other groups, that sued the agency and its acting director Russell Vought this week. They had asked the judge to “declare unlawful and set aside the defendants’ actions and intended further actions to dismantle the CFPB.”
The ruling by U.S. District Judge Amy Berman Jackson prevents any mass firings at the agency and prohibits the deletion of agency data.
“Defendants shall not terminate any CFPB employee, except for cause related to the specific employee’s performance or conduct; nor shall Defendants issue any notice of reduction-in-force to any CFPB employee,” the judge wrote.
The White House did not immediately respond to a request for comment. The CFPB media team also did not respond to a request for comment, though Vought issued a directive to employees last week to not issue public communications, among other instructions.
The court docket indicated that both parties agreed to the order.
The judge also ordered Vought and CFPB to not “take steps to reduce the amount of money available to the CFPB.”
Vought had previously sought to cut off additional CFPB funding. He said last week in a post to X that he notified the Federal Reserve that the bureau “will not be taking its next draw” of funding, arguing it was not necessary to carry out the bureau’s duties.
“This spigot, long contributing to CFPB’s unaccountability, is now being turned off,” he said in the post.
The ruling marks the latest in a series of blows to the Trump administration’s efforts to reshape the federal government.
Last week, Vought issued a series of directives to CFPB employees, instructing them to “cease all supervision and examination activity,” “cease all stakeholder engagement,” and not “approve or issue any proposed or final rules or formal or informal guidance,” among other directives. CFPB staffers were also instructed this week not to work.
Trump had previously laid out his aim to get rid of the bureau entirely. When asked this week if he could confirm whether it was his goal to completely eliminate the bureau, Trump said, “I would say yeah.”
“Because we’re trying to get rid of waste, fraud and abuse,” he said. The administration has not yet provided evidence to back up allegations of fraud at CFPB.
The Trump administration has had multiple legal setbacks in recent days.
On Thursday, a judge ruled that the administration must temporarily allow the disbursement of foreign aid. A separate judge temporarily halted plans to slash certain federal research funding.
But the administration also notched a win this week. On Wednesday, a judge ended a temporary pause on the White House’s “deferred resignation” offer program that incentivized federal employees to resign.
Gabe Gutierrez and Sarah Dean contributed.
