President Donald Trump first attempted to dismantle the consumer watchdog in February as part of the government cost-cutting effort headed by Elon Musk. A federal judge last month temporarily blocked the administration from shutting down the CFPB pending the outcome of a lawsuit brought by the National Treasury Employees Union, which represents the agency’s roughly 1,700 workers.
As part of that judge’s order, the administration was also required to reinstate probationary employees and other staff initially fired in February. The order also barred the administration from issuing reduction-in-force letters to any CFPB employees.
The CFPB, which is empowered to crack down on unfair, deceptive and predatory corporate practices, has drawn ire from Republican lawmakers since it was created in the wake of the 2008 financial collapse. Republicans faulted the Biden-era CFPB for engaging in regulatory overreach with its attempts to remove medical debt from credit reports, crack down on bank overdraft fees, and oversee efforts by Amazon, Google and other tech firms to offer digital payment services.
The layoffs were announced less than a day after the agency said it would slash its inspections of financial services companies in half and turn away from oversight of student loan, medical debt and digital payment issues, according to a memo sent to staff Wednesday from Mark Paoletta, the agency’s chief legal officer.
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