A federal judge has ordered a halt to attempts under President Donald Trump to dismantle the Consumer Financial Protection Bureau (CFPB), an independent government agency charged with investigating and preventing financial malpractice.
On Friday, US District Judge Amy Berman Jackson granted a request from employees, advocates and union representatives to issue a preliminary injunction, preventing the bureau from being shuttered while court proceedings continue.
“The Court cannot look away or the CFPB will be dissolved and dismantled completely in approximately thirty days, well before this lawsuit has come to its conclusion,” the judge wrote in her order.
She agreed with the plaintiffs that there was a risk of immediate, irreparable harm, given the speed with which the Trump administration’s efforts have unfolded.
“If the defendants are not enjoined, they will eliminate the agency before the Court has the opportunity to decide whether the law permits them to do it,” Berman Jackson wrote.
The ruling was the latest in the myriad court decisions facing the Trump administration’s campaign to streamline the federal government, often through large-scale staffing cuts and the elimination of entire agencies and departments.
Earlier in the day, Secretary of State Marco Rubio even announced he had informed Congress of plans to absorb the US Agency for International Development (USAID) into the State Department, putting its independent functions under executive control.
But critics have questioned whether such manoeuvres are legal. They argue that agencies like USAID and the CFPB were created as independent organisations under Congress and that the president has overstepped his constitutional bounds by overriding those congressional decisions.
The CFPB, in particular, has long been a target of conservative ire.
Established in 2011, the bureau was founded in response to the financial crisis of 2007 that was spurred on by predatory lending practices.
As an independent agency, the CFPB served as a watchdog, collecting research, monitoring financial markets and fielding complaints from ordinary consumers facing illegal or deceptive actions from their banks or financial service providers.
As of December 2024, the bureau had claimed credit for returning $21bn to consumers through debt relief, reductions or monetary compensation stemming from its enforcement activities.
But many Republicans and financial industry leaders have chafed at its enforcement and regulatory activities, accusing the bureau of hampering businesses.
On January 31, shortly after the start of his second term as president, Trump moved to fire the bureau’s director, Rohit Chopra, and replace him with an ally.
By February 8, the bureau had been ordered to cease all investigations, including pending ones, and stop any enforcement activity fundamentally halting its functions. The next day, its headquarters was closed. The bureau also started to see the same widespread layoffs facing other federal agencies.
Judge Berman Jackson opened her 112-page decision with quotes from some of the CFPB’s critics within the Trump administration.
“The CFPB has been a woke and weaponised agency against disfavoured industries and individuals for a long time. This must end,” said Russell Vought, the director of the Office of Management and Budget under Trump.
Another critic quoted in Berman Jackson’s order was Trump adviser and billionaire businessman Elon Musk, who called to “delete” the bureau.
“CFPB RIP,” he wrote succinctly on February 7, as his Department of Government Efficiency (DOGE) led the dismantling of the organisation.
Musk has been accused of having a conflict of interest with the CFPB, as he expands the financial services available on his social media platform X.
Judge Berman Jackson emphasised she did not take her decision lightly in the opening lines of her ruling.
“The motion for preliminary injunction to be decided boils down to one question: should the Court take action to preserve the Consumer Financial Protection Bureau now before the case concerning its fate has been resolved?” Berman Jackson wrote. “That is an extraordinary step.”
Still, she indicated that the injunction was necessary: “The Court’s oversight is the only thing holding the defendants back.”
Among the plaintiffs were the National Treasury Employees Union and the National Association for the Advancement of Colored People (NAACP), a prominent civil rights organisation.
But there was also an individual named in the complaint: Reverend Eva Steege, an 83-year-old Lutheran pastor who sought the CFPB’s help for student loans she incurred while at seminary.
While investigating Steege’s case, the CFBP found she not only qualified for loan forgiveness but also for $15,000 returned in overpayments.
Steege is in hospice care at the time, according to the complaint.
“It was her hope to resolve the debt and spare her family that burden after she died,” Judge Berman Jackson wrote in her ruling.
But the sudden shutdown of the CFPB’s services left Steege in a lurch, without a resolution to her case or a refund of her overpayment.
“Steege’s fear of leaving her surviving family members saddled with her student loan debt came to pass on March 15, when she died,” the judge explained.
Berman Jackson said the case raised questions about the separation of powers under the US Constitution and whether the president had encroached upon “legislative authority”.
“The evidence reveals that: the defendants were in fact engaged in a concerted, expedited effort to shut the agency down entirely when the motion for injunctive relief was filed,” she wrote.
“While the President is free to propose legislation to Congress to accomplish this aim, the defendants are not free to eliminate an agency created by statute on their own, and certainly not before the Court has had an opportunity to rule on the merits of the plaintiffs’ challenge.”
She also highlighted what she called a “disingenuous” arguments from the Trump administration’s lawyers.
“The Court is left with little confidence that the defense can be trusted to tell the truth about anything,” the judge wrote.
