Report: CFPB Employees Tell Court Leaders Plan to Wind Down Agency
Several federal employees reportedly said in statements submitted for a lawsuit that the new leadership of the Consumer Financial Protection Bureau (CFPB) plans to wind down the agency and fire most of its employees.
The statements were made in a case brought by the CFPB’s union and were released with the employees’ names replaced by pseudonyms, CNBC reported Friday (Feb. 28).
In the filings, employees said they had attended meetings between Feb. 18 and Tuesday (Feb. 25) in which leaders of the CFPB and members of the Department of Government Efficiency (DOGE) discussed mass layoffs that would be carried out in three phases and end two or three months later with only five statutorily mandated positions remaining, according to the report.
The CFPB did not immediately reply to PYMNTS’ request for comment.
The case by the CFPB’s union aims to stop the agency’s firings that already impacted about 200 probationary and term employees, the report said.
It led to the CFPB’s actions being paused until a March 3 hearing, per the report.
The union, the National Treasury Employees Union (NTEU), said in a Feb. 10 press release announcing the lawsuit that a shutdown of the CFPB would violate the separation of powers, as the agency was created by Congress.
“What is happening to CFPB should shock all Americans who are wondering what will happen to consumers without the CFPB on the job, and more broadly, what happens when the executive branch ignores the will of Congress,” Doreen Greenwald, national president of the NTEU, said in the release.
It was reported Tuesday (Feb. 25) that Justice Department attorneys said in court filings that the Trump administration plans to streamline, not dismantle, the CFPB.
The Justice Department attorneys said that the lease of the CFPB’s headquarters has been canceled and that the agency will require less office space moving forward, but that the agency will continue to operate its call center and database for consumer complaints, produce mortgage data and require payments to consumers harmed by corporate misconduct.
The Trump administration’s nominee to head the CFPB, Jonathan McKernan, said Thursday (Feb. 27), that as director he would be tasked with carrying out “specific statutory responsibilities that are mandatory.”
Appearing before the Senate Banking Committee during a hearing on his nomination, McKernan said: “I am fully committed to following the law fully and faithfully.”
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