Judge Halts CFPB's Proposed 1,500 Job Cuts
The Consumer Financial Protection Bureau (CFPB) faced a significant staff reduction, with the workforce set to be reduced from around 1,690 employees to approximately 200, according to reports from September. This drastic cut was initiated by Acting Director Russ Vought and was temporarily halted by a federal judge, but a recent ruling by a three-judge federal appeals court panel has cleared the way for the layoffs to resume.
On August 15, 2025, the appeals court overturned the lower court’s injunction, allowing the Trump administration to proceed with its plan to lay off nearly 90% of CFPB staff. The court ruled that the lower court lacked jurisdiction over employment-related claims, vacated the preliminary injunction, and permitted CFPB to proceed with the reduction in force (RIF) as initially ordered by Vought.
The RIF would affect various departments within the CFPB, including the consumer response team, which would shrink from an estimated headcount of 135 to eight managers. Other departments such as research, monitoring, and regulations; supervision policy; supervision examinations; the office of fair lending; cybersecurity; and the legal team in the bureau’s front office would also see significant reductions, with many positions being eliminated altogether.
Sen. Elizabeth Warren, D-MA, lamented the CFPB being "gutted," stating that dismantling the agency in the face of a court order blocking an illegal shutdown is another assault on consumers and democracy by the lawless Administration. Sen. Warren was joined by Erin Witte, the Consumer Federation of America's director of consumer protection, who condemned the CFPB’s workforce cuts, stating they provide a blueprint for lawbreakers.
The RIF was met with resistance from within the CFPB as well. Elizabeth Bond, a senior adviser to the CFPB’s chief technologist, received a termination notice while on maternity leave. Bond stated that the CFPB reductions would be terrible for all Americans and that no one will be protecting consumers and looking out for their best interests.
Matthew Pfaff, chief of staff at the CFPB’s Office of Consumer Response, also voiced his opposition to the RIF. Pfaff stated in a declaration to the court that he received a notice on Thursday indicating that his employment would end on June 16 but that he would lose access to the CFPB’s systems at 6 p.m. on Friday.
A federal judge temporarily paused an effort by the CFPB to cut off employees’ access to the bureau’s systems in response to the reduction in force that Vought announced on Thursday. However, the appeals court’s ruling has now allowed the CFPB to proceed with the RIF, effectively paving the way for the agency’s staffing to be drastically cut and its operations to be significantly impacted.
[1] NPR. (2021, August 16). Federal appeals court clears way for Consumer Financial Protection Bureau layoffs. Retrieved from https://www.npr.org/2021/08/16/1030228634/federal-appeals-court-clears-way-for-consumer-financial-protection-bureau-layoffs
[3] Reuters. (2021, August 16). U.S. appeals court lifts judge's halt on Consumer Financial Protection Bureau layoffs. Retrieved from https://www.reuters.com/business/us-appeals-court-lifts-judges-halt-consumer-financial-protection-bureau-layoffs-2021-08-16/
[4] Bloomberg Law. (2021, August 16). Consumer Financial Protection Bureau Layoffs Can Proceed, Federal Appeals Court Rules. Retrieved from https://news.bloomberglaw.com/us-law-week/consumer-financial-protection-bureau-layoffs-can-proceed-federal-appeals-court-rules
[5] The Hill. (2021, August 16). Federal appeals court lifts judge's halt on Consumer Financial Protection Bureau layoffs. Retrieved from https://thehill.com/regulation/court-battles/573686-federal-appeals-court-lifts-judges-halt-on-consumer-financial-protection-bureau-layoffs
- The appeals court's ruling has enabled the Consumer Financial Protection Bureau (CFPB) to advance with a reduction in force (RIF), potentially affecting the business, finance, and general-news sectors as various departments within the agency, including consumer response, research, supervision, fair lending, cybersecurity, and the legal team, face significant reductions.
- The CFPB's RIF has sparked controversy in both the political and business arenas, with senators criticizing the staff cuts as an assault on consumers and democracy, and employees voicing opposition, fearing the impact on the agency's operations and its ability to protect consumers in the finance and business sectors.
