Answering a call to action by Democratic senators Elizabeth Warren and Andy Kim, a government watchdog agency will investigate recent actions by the Consumer Financial Protection Bureau (CFPB), including the bureau’s attempts to lay off nearly 90% of its workforce.
The nonpartisan Government Accountability Office confirmed the request to investigate the CFPB in a letter to Warren and Kim, who had asked the watchdog group to “examine the impact of recent stop work orders, firings and reductions in force, contract cancellations, decisions to drop major lawsuits and other related actions on the CFPB’s efforts to enforce consumer protection laws.”
In a letter sent Monday to CFPB Acting Director Russell Vought, Warren and Kim were joined by 38 senators — all of whom are Democrats except Bernie Sanders, I-Vt., and Angus King, I-Maine — in expressing “grave concerns” about what they alleged were “illegal actions” Vought took since taking the reins of the CFPB on February 6, including the agency’s April 17 email that notified 1,483 of its 1,690 employees that their jobs had been eliminated.
The letter requested that Vought provide by May 7 a “detailed accounting of each of the more than 80 statutory obligations of the CFPB,” as well as how the agency planned to fulfill those functions if federal courts uphold the legality of the CFPB’s plans to lay off all but 207 workers.
“Your hasty and unjustified mass firings are an illegal shutdown of the CFPB that will leave it unable to conduct agency actions that are required by law,” the letter stated.
Courtroom updates
Vought and the CFPB are also embroiled in a lawsuit filed by a union representing CFPB workers. That civil complaint, filed in February, stemmed from Vought’s initial shuttering of the bureau shortly after being confirmed as acting director.
On Monday, a federal appeals panel backtracked on a previous ruling that CFPB leaders had interpreted as a green light to proceed with the mass layoffs on April 17.
The U.S. Court of Appeals for the District of Columbia Circuit on April 11 had halted parts of a preliminary injunction issued March 28 by U.S. District Judge Amy Berman Jackson that prevented the CFPB from carrying out workforce reductions. The appeals court ruled that layoffs would be permitted if the agency first conducted a “particularized assessment” indicating that the employees were not needed for the bureau to fulfill its statutory duties.
Following the April 17 mass layoffs, Judge Jackson stepped in again the next day to block the workforce reductions.
In Monday’s 2-to-1 ruling, the appeals court said its previous April 11 ruling did not clearly define the term “particularized assessment.” The revised order restores the portion of Jackson’s injunction that blocks the layoffs until the civil complaint filed against Vought by the union representing CFPB employees is resolved.
In the lone dissent, Circuit Judge Neomi Rao argued that “the preliminary injunction entered by the district court raises serious separation of powers concerns and has paved the way for ongoing judicial supervision of an executive branch agency.”
“Whatever the merits of this underlying lawsuit, the district court cannot erase the boundaries between the courts and the executive (branch) by setting up a temporary judicial receivership of the CFPB,” the dissent stated.
Judge Jackson had scheduled an evidentiary hearing for April 29 that would have likely included testimony from Gavin Kliger, a staffer with the Department of Government Efficiency (DOGE) who was involved with the CFPB workforce reduction plan. That hearing was canceled in light of the latest ruling by the appeals court, which is scheduled to begin hearing oral arguments in the CFPB case on May 16.
