Judge keeps pause on mass firings at CFPB as she considers Trump's attempt to shut agency

A federal judge Monday kept in place an order prohibiting mass firings at the Consumer Financial Protection Bureau while she sorts through conflicting claims about whether the Trump administration is still trying to shutter the independent agency.

The ruling by U.S. District Judge Amy Berman Jackson in Washington, D.C., came after a top official at the CFPB who has been the chief operating officer since February 2023 said in a court filing Sunday that the administration was now "right sizing" the agency instead of trying to eliminate it completely.

That contrasts with court filings last week in which federal employees alleged that plans were underway by the Trump administration to reduce the financial watchdog agency's workforce from the current roster of 1,700 down to five.

Jackson said at a hearing Monday that the question before her was: “Is this impeding doom, or is this not impending doom?”

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Speaking to a Justice Department lawyer, she asked, “You can’t blow it up, but why should you be able to starve it to death?”

The judge also asked the government attorney, Liam Holland, if "making sure consumers are protected from abusive practices" was "inconsistent with policy priorities of this administration."

"I don’t know the answer to that question, your honor," Holland replied. He portrayed the work stoppage orders as typical of turnover in presidential administrations, but could not provide an example when the judge asked him for any historical corollary.

The lawyer for the CFPB employees, Deepak Gupta, said the case presented "a grave separation of powers" problem, because the administration was stopping the agency from carrying out its congressionally mandated and funded duties. Gupta said the administration's goal is a "complete shutdown" of the agency.

The judge said she was keeping her consent order in place to make sure the agency isn't “choked out of its very own existence” before she rules on the request by unions, who are representing CFPB employees, for a preliminary injunction to block the agency from being stripped down.

The CFPB was an early target of Elon Musk's Department of Governmental Efficiency. On Feb. 7, he tweeted "CFPB RIP," next to an emoji of a tombstone.

The top official who recently denied the agency was being shuttered, chief operating officer Adam Martinez, acknowledged in a sworn declaration that he'd previously told employees the CFPB was in "wind down mode" and facing "closure," but said that position began to change soon after Russell Vought was named acting director.

"Rather than a closure of the agency, Acting Director Vought’s new leadership has focused on running a substantially more streamlined and efficient bureau, refocusing its priorities, and 'right sizing' the agency," he said in his declaration.

The plaintiffs noted that Vought, who also serves as director of the White House Office of Management and Budget, was the person who issued a stop work order to all CFPB employees on Feb. 10.

Martinez also maintained that some offices in the agency that had been closed were now back up and running, including "work related to compliance with the agency’s critical statutory responsibilities in the area of the Office of Consumer Response. Thus, as of February 27, 2025, members of the Escalated Case Management team, for example, are working."

But the plaintiffs' countered with a sworn declaration on Sunday from a member of that team who said Martinez's assertion was "false."

"No member of the Escalated Case Management has performed any work since at least the February 10th stop-work order. Neither I, nor any member of the Escalated Case Management team, was asked (or authorized) to work on February 27th, or any date before or after that. To confirm my understanding, I contacted each member of the Escalated Case Management team, all of whom confirmed that they remained unauthorized to work. I also checked my email inbox, as well as the shared team inbox, and neither contains any directive or authorization for the Escalated Case Management team to resume working," said the staffer, who used the pseudonym Emory Doe "because I fear retaliation."

Another staffer, Matthew Pfaff, said in a declaration that Martinez had sent out an email to some executives on Feb. 27 that "statutorily required work and/or work required by law are authorized" to resume, but that he hadn't responded to questions about which programs.

Yet another staffer, identified only as Greer Doe, said in a separate declaration that workers have "extreme anxiety" about complying with Martinez's email since Vought's stop work order was never rescinded. They're scared they "might be terminated for insubordination" if they do any work, wrote Doe, who also appeared skeptical that Martinez's email was on the level.

"I interpret COO Martinez’s email as a somewhat transparent effort—in advance of a hearing in this Court—to create the appearance that statutorily required work is taking place across the Bureau when in fact it is not," Doe wrote.

The judge said she would hold another hearing on March 10, and directed Martinez to appear as a witness. She also told the plaintiffs she expects testimony from witnesses with "personal knowledge" about the current state of operations at the agency.