Appeals court restores ban on CFPB mass layoffs

A U.S. appeals court on Monday restored a temporary block on mass layoffs at the Consumer Financial Protection Bureau, allowing employees to keep their jobs for the time being despite the Trump administration’s plan to cut the agency’s staff by 90%.

On Monday, Judges Cornelia Pillard and Gregory Katsas reinstated the ban on mass firings, saying it was necessary to preserve legal protections for workers while the case moves through the courts. In a dissent, Judge Neomi Rao, a Trump appointee, said the ruling “hamstrings the Executive and prevents the CFPB from downsizing until the merits of the appeal are resolved.”

The move is a blow to President Donald Trump’s push to dramatically restructure the CFPB, potentially whittling its workforce down to as few as 200 employees.

Reuters reported that agency staff have warned in sworn statements that such deep cuts would cripple the CFPB’s operations.

HousingWire exclusively reported last week that the cuts would see some mortgage-focused divisions cut down to a handful of staffers (or fewer). Doing so would push the regulatory burden onto the states, attorneys and mortgage compliance pros told HousingWire.

The CFPB — created in the aftermath of the 2008 financial crisis and originally championed by Sen. Elizabeth Warren — has drawn criticism from the Trump administration, as well as from some in Silicon Valley and Wall Street, who contend that the agency oversteps its regulatory mandate.

The CFPB has had several shakeups since the Trump administration assumed control of the agency. The Trump administration has moved to fire large numbers of staff, with both Trump and billionaire adviser and DOGE-leader Elon Musk advocating for the agency’s elimination.

In February, acting CFPB Director Russell Vought instructed agency staff to stop all work “unless expressly approved by the Acting Director or required by law.” In early March, CFPB employees were told to continue working on “statutorily required work.”

The administration has since shifted its stance, saying the CFPB will remain in place but with a significantly reduced staff.

Last month, a trial court temporarily blocked the mass layoffs. The appeals court has now revised that decision, permitting the CFPB to proceed with layoffs only after a “particularized assessment” demonstrates that the employees in question are not essential to the agency’s legally mandated duties.

After April 17’s attempted purge of nearly 1,500 workers, Judge Amy Berman Jackson scheduled a last-minute hearing the following day that temporarily blocked the layoffs and prevented the agency from cutting off the employees’ computer access as planned.

The CFPB did not immediately reply to HousingWire’s request for comment.