WASHINGTON, July 10 - A federal court on Friday put a union lawsuit on hold that sought to prevent the Trump administration from dismantling the nation’s primary consumer financial regulator. The pause directs the lawsuit to await action by lawmakers on the nomination of a new CFPB director, according to court documents.
The current leadership at the agency told the court that the administration’s nominee, Brian Johnson - a senior executive at Capital One and former top CFPB official - should be given the authority to assess whether to move forward with proposed large-scale layoffs that the administration has been trying to implement for more than a year.
Judge Amy Berman Jackson ordered that the parties inform her within two days if the Senate confirms Johnson as director. That directive effectively suspends a parallel judicial review prompted by a revised layoff plan unveiled in April.
Last month, a federal appeals court allowed Judge Jackson to consider lifting the preliminary injunction she had issued the previous year. That injunction prevents the administration from carrying out mass terminations of CFPB employees while courts determine the legality of such actions. The order entered on Friday pauses that appeals-court-directed consideration.
Under the April reorganization, the CFPB’s workforce would be reduced to 556 employees - a level stated to be less than one-third of the agency’s size when the Trump administration took office. The plan would cut roughly 80% of positions in the enforcement division and about 85% of jobs in supervision.
Both sides in the litigation agreed in a joint motion that, should the Senate confirm Johnson, he ought to have the opportunity to review the updated layoff proposal and decide whether to pursue it. That joint filing prompted Judge Jackson’s Friday order putting the dispute on pause.
The Consumer Financial Protection Bureau was established by Congress after the 2008 financial crisis with the stated purpose of preventing predatory lending and policing consumer financial markets. Senior administration officials, including acting CFPB leader Russell Vought - who publicly supported abolishing the agency - have argued the agency engages in politicized enforcement and imposes excessive burdens on companies. Consumer advocates counter that eliminating or weakening the CFPB would amount to an unlawful favor to politically connected corporate actors and could threaten public welfare.
Russell Vought, who assumed the acting directorship last year and previously served as the White House budget director, is legally required to step down at the start of August. The court’s instruction to notify Judge Jackson within two days of any Senate confirmation creates a short window in which the litigation’s trajectory may shift depending on congressional action.
Context and next steps
The pause noted in the court order means the central question of whether the administration can proceed with sweeping workforce reductions at the CFPB will remain unresolved until the Senate acts on the nomination and the newly confirmed director - if any - reviews the revised plan. The appeals-court process that might have considered lifting the injunction is on hold for now.