Consumer watchdog agency asks court for permission to slash its workforce by two-thirds

A consumer watchdog agency would see its workforce cut in by two-thirds from the staffing levels it employed 15 months ago under a new plan the Trump administration is seeking court approval to implement.  

Under the revised layoff plan, the Consumer Financial Protection Bureau would retain 556 employees. That would be down from more than 1,100 employees currently and more than 1,700 when President Trump took office. 

The plan “makes clear that CFPB leadership will not close the agency absent the injunction, contrary to the central factual premise on which the injunction is based,” Trump administration attorneys said in a new filing to an appeals court this week.

Instead, the agency would implement reductions in force to “streamline agency operations” while leaving it sufficiently staffed to meet its legal obligations. Cuts are necessary, the agency argued, because of funding cuts it sustained as part of the One Big Beautiful Bill Act that President Trump signed into law last year. Some RIFs will be necessary by the fall, it said. 

Attorneys for the administration further argued the prohibition on layoffs is overly broad given the new precedent Supreme Court created last year limiting the circumstances in which judges can grant nationwide injunctions. 

The administration argued that the ongoing injunction is harming its efforts to carry out standard workforce reshaping efforts. 

“A modification of the stay would alleviate ongoing harm to the executive branch’s prerogative to right-size agency operations in line with an important presidential policy,” the attorneys said. 

A year ago, the U.S. District Court in Washington paused mass reduction-in-force efforts, after CFPB had tried to lay off 90% of its staff—or around 1,500 employees. The U.S. Court of Appeals for the District of Columbia subsequently ruled that the RIFs could proceed. The court delayed their implementation while a union sought an en banc hearing before the entire appellate panel, however, and that panel in December threw out the initial appellate decision while it prepared to hear oral arguments.

It held those arguments in February but has yet to issue a decision. 

Cuts to the agency would most significantly impact the enforcement, operations and supervision divisions, which would see reductions of 80%, 61% and 85%, respectively, compared to when Trump took office. The new staffing levels would align with the Trump administration’s priorities, CFPB said in its new plan, such as reducing the number of enforcement actions. 

“Going forward, exercising its discretion in how to conduct enforcement, the current leadership has green-lit certain investigations that continue to align with its priorities,” the bureau said. “But their number and scope also do not require the Enforcement Division staffing at the current levels.”

While the attorneys said the plan amounted to the “particularized assessment” a federal judge previously found the bureau failed to make and demonstrated exactly how each division would meet its statutory requirements, employees said the staffing figures seemed arbitrary. 

“How those numbers were arrived at, nobody knows,” one CFPB worker said. “Many statutorily required functions appear to have no employees remaining after a possible RIF.” 

Another employee said CFPB could have laid off the majority of staff by now if it had simply followed normal procedures for doing so. 

“There’s no logic in anything they do,” the staffer said. 

Cat Farman, president of the National Treasury Employees Union chapter that represents CFPB employees called the agency’s assertion that it can carry out all of its duties with one-third the staff “laughable” and “an insult to the intelligence of the judges.” 

“This is [acting CFPB Director Russ] Vought’s latest half-baked shutdown plan in his tiresome quest to destroy the CFPB via mass layoffs,” Farman said. “Everyone knows Vought doesn’t want CFPB to exist at all.” 

Employees are still working, though they said they are doing so with diminished workloads. Late last year, CFPB attempted to defund the agency and warned employees widespread furloughs would result. The original district court judge on the case prevented that action, however, and funding has since been restored.