The Trump administration announced plans on Thursday to lay off nearly 1,500 of the 1,700 employees left at the Consumer Financial Protection Bureau or CFPB.
The action would significantly scale back the CPSC’s work, including abandoning supervision exams, enforcement, penalizing lawbreaking conduct, and “deprioritizing” many critical consumer protection issues such as student loans, fair lending, and medical debt.
However, on Friday, Judge Amy Berman Jackson of the Federal District Court in Washington, D.C., temporarily blocked the action until April 28, when a hearing will be held.
Jackson ruled on a lawsuit filed by the CFPB’s staff union and others.
“Sabotaging the CFPB by firing almost 90% of its remaining civil servants who protect Americans from corporate crime is hardly the ‘individualized’ or ‘particularized’ assessment that the court required the CFPB to undergo,” Erin Witte, director of consumer protection for the Consumer Federation of America, or CFA, a consumer advocacy organization, said in a statement.
The CFPB has saved American consumers about $21 billion since it was created after the Great Recession, which began in 2008.
“The only winners here are predatory lenders, surveillance Big Tech firms, fraudsters, and financial institutions that want to profit at our expense,” said Adam Rust, director of financial services for the CFA.
