A federal judge has stopped the Trump administration from dismantling the Consumer Financial Protection Bureau (CFPB). The ruling protects the agency’s employees, operations, and data while a legal battle over its future continues.
Judge Amy Berman Jackson issued a preliminary injunction on Friday. Her decision prevents mass layoffs, reinstates terminated staff, and blocks further attempts to shut down the agency.
“The Court cannot look away,” Jackson wrote in her 112-page opinion. “The CFPB will be dissolved and dismantled completely in approximately thirty days, well before this lawsuit has come to its conclusion.”
What the Ruling Means
The court order:
- Reinstates employees who were fired
- Blocks further layoffs or reductions
- Preserves CFPB contracts and internal data
- Requires the agency to resume essential operations
- Restores access to the consumer complaint hotline
Jackson said immediate action was necessary. Without it, the CFPB could disappear before the court decides whether the dismantling is legal.
Why the CFPB Was at Risk
The ruling comes after the National Treasury Employees Union filed a lawsuit in February. The union represents over 1,000 CFPB workers. They argued that the administration overstepped its authority by trying to eliminate an agency Congress created.
The move followed sweeping orders from Russell Vought, who was named acting director of the CFPB while also leading the Office of Management and Budget. Vought quickly froze all supervision and examinations, closed the agency’s headquarters, and fired dozens of employees.
Internal documents revealed plans to cut over 1,200 workers, more than two-thirds of the CFPB’s staff. According to sworn testimony, the administration intended to keep only five employees and move key functions elsewhere.
“There would be no agency to preserve,” said Deepak Gupta, a lawyer for the plaintiffs.
Elon Musk’s Role in the CFPB Shake-Up
The Department of Government Efficiency (DOGE), led by Elon Musk, played a key role in the attempted shutdown. The group arrived at the CFPB in early February and immediately began restructuring.
Musk even posted “RIP CFPB” on X (formerly Twitter), signaling his intent to gut the agency. The rapid changes caused internal chaos.
“DOGE came in with a very hard fist,” said Adam Martinez, the CFPB’s chief operating officer. “When the OMB director’s team came in, I felt the adults were around the table at that point.”
Although things stabilized somewhat in March, concerns about mass layoffs and reduced services remain.
A Battle Over Power
The CFPB was created in the aftermath of the 2008 financial crisis. It protects consumers from fraud, monitors student loan companies and banks, and enforces financial regulations. It also processes thousands of complaints from the public.
Eliminating the agency would remove a major layer of federal oversight. Plaintiffs in the case say that only Congress has the authority to eliminate the CFPB.
The administration claims it doesn’t plan to shut down the agency. Officials pointed to the nomination of Jonathan McKernan as a sign of continuity. However, internal emails and testimony tell a different story, showing clear plans to “wind down” the bureau.
What’s Next?
For now, the court’s order keeps the CFPB alive. Judge Jackson made it clear that preserving the agency during the lawsuit is essential.
“If the defendants are not enjoined, they will eliminate the agency before the Court has the opportunity to decide whether the law permits them to do it,” she wrote.
Although the ruling is temporary, it’s a major win for CFPB employees and consumer advocates. The case will continue, and a final decision on the agency’s future is still to come.
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