Federal Judge Halts Layoffs at the CFPB
Commentary by Steven Lofchie
A federal judge ordered the Acting Director of the CFPB not to terminate employees except for cause, not to delete records and not to transfer money out of the CFPB except to pay the CFPB's ordinary expenses.
In National Treasury Union v Russell Vought, Acting Director of the CFPB, before the US District Court for the District of Columbia, the Court ordered that the "Plaintiffs' motion for a temporary restraining order is hereby deemed to be a motion for a preliminary injunction." The CFPB "must file any opposition to plaintiffs' motion on or before February 24, 2025, and plaintiffs' reply must be filed on or before February 27, 2025."
The Court will consider issuing a longer-term preliminary injunction during a court hearing on March 3.
Commentary
The CFPB was devised as an agency that would be largely independent of both the President and Congress—a power unto itself. Congress does not appropriate funds to the CFTC. Rather, the head of the CFPB could independently appropriate funds from the Federal Reserve.
There is no law that would require the new head of the CFPB to appropriate funds for the agency. So, if Mr. Vought decides to let the agency go bust, that would seem to be entirely consistent with the law as written and adopted (by the Congress that adopted Dodd-Frank).
In short, the CFPB is doomed to be hoist by its own petard.
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