CFPB Fellows Terminated as Union Warns of ‘Mass Layoff’ Soon (1)

Acting Consumer Financial Protection Bureau chief Russell Vought is planning a “mass layoff” at the consumer watchdog that “may occur imminently—as early as today or tomorrow,” the agency’s union said in a Thursday court filing.

Official communications announcing the likely impending layoff haven’t yet been circulated, but the union in its filing said Vought is preparing to fire “over 95% of the Bureau’s employees.”

The CFPB had more than 1,750 employees at the end of September, according to the agency’s fiscal 2024 financial report.

The purge started late Thursday with the firing of 70 to 100 “term employees,” according to four CFPB sources granted anonymity to protect against retaliation. Those included fellows with a two-year contract and people who are part of the CFPB director’s “Financial Analyst” program, a two-year program for recent college graduates. The term employees have full civil service protections.

The career employees were told they were being fired to comply with President Donald Trump’s Feb. 11 “workforce optimization initiative” executive order, according to a termination letter obtained by Bloomberg Law.

The union’s comments about a mass layoff were added to a complaint it filed on Feb. 9 challenging Vought’s moves to freeze the agency’s work.

The National Consumer Law Center, the NAACP, the Virginia Poverty Law Center, and the CFPB Employee Association signed on as plaintiffs to the lawsuit.

Also joining as a plaintiff is Eva Steege, an 83-year-old Lutheran pastor with only six months to live, according to the amended complaint.

Steege had been attempting to discharge her student debt before she dies, but the CFPB canceled a scheduled meeting and the agency’s Student Loan Ombudsman’s office has been shuttered under Vought’s agency freeze, the lawsuit said.

In addition, military service members haven’t received cash they were expecting from a CFPB settlement with an auto title lender because employees necessary to approve the payments are subject to the work stoppage, according to the complaint.

Vought is also the director of the Office of Management and Budget. OMB declined to comment on the record.

Dodd-Frank Mandates

A staff reduction of the magnitude alleged in the filing would make it all but impossible for the CFPB to perform actions mandated by Congress.

Created following the 2008 financial crisis, the CFPB is required to fulfill certain functions, like maintaining an Office of Service Member Affairs, an Office of Financial Protection for Older Americans, and an Office of Fair Lending and Equal Opportunity, each of which is required to provide an annual report to Congress.

The CFPB is also required to supervise all banks with $10 billion or more, large mortgage servicers, the largest payday lenders, consumer credit reporting companies, and other firms.

President Donald Trump on Feb. 11 nominated Jonathan McKernan to be the next CFPB director. Even if McKernan aims to rebuild the agency, his ability to rehire staff may be limited by Trump’s executive order mandating that four employees be fired for every new hire at a federal agency.

CFPB Shutdown

The CFPB has faced widespread upheaval since Elon Musk’s Department of Government Efficiency staffers descended late last week and Vought largely halted agency operations.

Earlier this week, the agency under Vought terminated 70 probationary employees, many from the enforcement division, and canceled more than $100 million in vendor contracts.

Vought also said he would request no funding from the Federal Reserve in the next quarter in a Feb. 8 post on X, Musk’s social media platform. The CFPB is funded through the Fed, independent of Congress, under a setup the US Supreme Court upheld last year.

The city of Baltimore and Economic Action Fund Maryland on Wednesday sued the CFPB to stop Vought’s efforts to defund the agency. The plaintiffs rely on data from the CFPB to perform critical functions, they said.

The closure is an attempt to “do by fiat what opponents of the CFPB were unable to do in Congress or the courts,” Baltimore’s complaint, filed in the US District Court for the District of Maryland, said.

Gupta Wessler LLP and Public Citizen Litigation Group represent the plaintiffs in the CFPB union suit.

The case is Nat’l Treasury Emps. Union v. Vought, D.D.C., No. 1:25-cv-00381, amended complaint 2/13/25.