A federal judge has ordered a halt to efforts to dismantle and close down the Consumer Financial Protection Bureau (CFPB). Acting on a lawsuit filed by numerous organizations, Judge Judge Amy Berman Jackson ordered that no CFPB)records or data be deleted, no CFPB employees be terminated, and no CFPB funds be returned pending a preliminary injunction hearing set for March 3.
The lawsuit was filed by Public Citizen Litigation Group, Gupta Wessler LLP, and the National Treasury Employees Union (NTEU), represents a coalition of organizations including NTEU, the National Consumer Law Center, the National Association for the Advancement of Colored People (NAACP), the Virginia Poverty Law Center, the CFPB Employee Association, and Pastor Eva Steege. The plaintiffs argue that the administration’s actions are unconstitutional and pose severe threats to consumer protection in the U.S.
CFPB background
Established by Congress in response to the 2008 financial crisis, the CFPB has secured billions of dollars in relief for consumers and ensured greater transparency in financial markets. However, President Trump has repeatedly signaled his intention to eliminate the CFPB, with the latest moves accelerating its potential dismantling.
The lawsuit claims that the administration’s actions—such as rolling back operations and suspending enforcement—violate the constitutional authority of Congress, which created the agency to function independently. Legal experts warn that allowing these efforts to continue unchecked could leave millions of American consumers vulnerable to fraud and financial exploitation.
Potential impact
Among those directly affected by the administration’s move is Reverend Eva Steege, an 83-year-old retired Lutheran pastor currently in hospice care. Reverend Steege was working with CFPB staff to resolve her Public Service Loan Forgiveness (PSLF) application, potentially securing over $15,000 in refunds for previous loan payments.
However, on February 9, the administration's decision to curtail CFPB operations resulted in the abrupt cancellation of her follow-up meeting, leaving her without assistance.
"The CFPB fills a unique and essential role in our economy, protecting consumers from financial exploitation. Without it, we risk returning to the predatory lending and fraudulent practices that led to the 2008 crisis,” Richard Dubois, executive director of the National Consumer Law Center said.
Deepak Gupta, founding principal of Gupta Wessler LLP and a former senior counsel at the CFPB, described the administration’s actions as “lawless.” He said, “The President and his acting director lack the authority to defund, suspend, or shut down the agency’s work. We seek an immediate court order restoring the CFPB’s operations and preventing further harm to consumers.”