CFPB cleared to fire 90% of staff by appeals court decision

The CFPB can go ahead with plans — announced in April — to fire 90% of its staff, a federal appeals court panel ruled on Friday.

The U.S. Court of Appeals for the D.C. Circuit found that “the district court lacked jurisdiction to consider the claims predicated on loss of employment, which must proceed through the specialized-review scheme established in the Civil Service Reform Act,” wrote Judge Gregory Katsas in the majority opinion.

Staff at the CFPB were sent Reduction in Force notices on April 17 but the layoffs were blocked on April 29, allowing staff to continue working. Now, 1,500 of the agency’s staff are expected to be cut, leaving only 200 workers to oversee essential offices.

Exclusive HousingWire reporting in April showed that the cuts could leave just one employee in the Office of Fair Lending and Equal Opportunity, along with an 80% reduction in enforcement staff and a 90% cut in supervision personnel – divisions that most directly impact mortgage lenders. 

According to the plan, the CFPB’s Director’s Office, which houses the Office of Fair Lending, would be reduced to just five employees from 86. The enforcement division would shrink to 50 from 248, with the Bureau shifting its focus to “tangible consumer harm” and deferring more oversight to state regulators. Read a detailed list of cuts here.

Attorney General Pam Bondi celebrated the decision in a post on X on Friday, saying: “The CFPB is now free to right-size itself in accordance with the law to best serve the American people.”