Trump Administration Targets CFPB with Mass Layoffs and Headquarters Closure

Washington, D.C. - The Trump administration is moving to dismantle the Consumer Financial Protection Bureau (CFPB) through a series of actions, including mass layoffs and the cancellation of its headquarters lease, according to a federal lawsuit filed on Thursday.

The lawsuit alleges that the plan would leave the CFPB with only a skeletal staff, severely impairing its ability to regulate financial institutions and protect consumers. The administration's goal is to eliminate the agency, which was created by Congress in the wake of the 2008 financial crisis.

Acting Director Russell Vought has ordered staff to halt all work and stay home, while dozens of employees have been laid off and contracts with vendors canceled. The administration has openly expressed its desire to eliminate the CFPB, with President Trump calling it a "waste" and "vicious group of people."

The lawsuit, filed by a federal employees union and nonprofits that work with the CFPB, seeks to reverse the stop work orders and prevent further firings. It argues that the mass layoffs would leave the bureau unable to perform its legal responsibilities.

The CFPB has already paused all supervision of banks and other lenders, and its consumer complaint portal has been disrupted. The agency typically receives hundreds of thousands of complaints per month.

According to the suit, Vought plans to return the CFPB's operating reserves to the Federal Reserve. He has informed the Fed that the agency will not require any new funding for the coming quarter.

The lawsuit does not explicitly cite the source of rumors regarding mass firings, but indicates that Trump officials have informed the General Services Administration of the termination of the CFPB's headquarters lease.

The clash over the CFPB is seen as a test of the Trump administration's authority to reshape the federal bureaucracy. The agency was created by Congress in the Dodd-Frank Wall Street Reform and Consumer Protection Act to prevent predatory lending practices.

The lawsuit argues that by dismantling the agency, the Trump administration is overstepping its authority and violating the Constitution's mandate for faithful execution of the laws.

The CFPB is not the only agency facing mass layoffs. The Bloomberg reports that leaders at the Department of Housing and Urban Development have been instructed to lay off 50% of its workforce. However, courts have intervened to block some firings.

A hearing in the CFPB case is scheduled for Friday at 2 p.m. before US Senior Judge Amy Berman Jackson.