A federal judge issued a preliminary injunction Friday blocking the Trump administration from carrying out mass firings or otherwise dismantling the Consumer Financial Protection Bureau.
Calling the injunction “an extraordinary step,” Judge Amy Berman Jackson of the Federal District Court in Washington said she imposed it to prevent the agency from being “dissolved and dismantled.” The lawsuit’s plaintiffs — the bureau’s staff union and a collection of consumer advocates — are likely to succeed in their claim that the administration’s actions to gut the agency were illegal, the judge wrote in a 112-page decision.
“This ruling upholds the Constitution’s separation of powers and preserves the bureau’s vital work,” said Deepak Gupta, the lawyer representing the union. Representatives of the consumer bureau did not respond to a request for comment.
The bureau, created after the 2008 financial crisis, has been in turmoil since Feb. 7, when President Trump appointed Russell T. Vought, the director of the White House budget office, as the agency’s acting director. Mr. Vought quickly fired hundreds of employees, ordered the rest to stop all work, closed the bureau’s offices and canceled contracts with vendors for staffing and services that are essential to the agency’s operations.
But only Congress can close the bureau, and parts of the agency have flicked back to life over the past seven weeks in response to legal challenges. Nearly 200 terminated employees have been rehired, and some of the agency’s departments have returned to work to carry out the bureau’s legally mandated responsibilities. Most of the staff, however, has remained on administrative leave.
For years, the financial industry has complained that the consumer bureau, which regulates a range of lending activity from mortgages to credit cards, has been overly aggressive, tying up companies in litigation and red tape and hindering credit from flowing to consumers.
Judge Jackson wrote that Mr. Vought’s actions “were taken in complete disregard for the decision Congress made 15 years ago” to create the agency and assign it the power to monitor banks and other lenders and enforce consumer protection laws. Without an injunction, she said, the government would likely “complete the destruction of the agency completely in violation of law” and annihilate it so thoroughly that “it will be impossible to rebuild.”
The judge opened her ruling with three epigraphs quoting senior administration officials — including Mr. Trump himself — openly stating their intention to destroy the bureau. (“That was a very important thing to get rid of,” Mr. Trump said in early February, praising Mr. Vought’s actions.)
Judge Jackson’s order instructs the government to reinstate and preserve the bureau’s contracts, employees, data and operations while the case progresses.
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