A federal judge has stopped attempts to dismantle the Consumer Financial Protection Bureau (CFPB), an independent government agency responsible for investigating and preventing financial fraud under President Donald Trump.
On Friday, U.S. District Judge Amy Berman Jackson granted requests to issuance of interim injunctions from employees, supporters and union representatives, preventing the department from being shut down while court proceedings continue.
“The courts can’t look away or the CFPB will be dissolved and will be completely dismantled in about 30 days.
She agreed to the plaintiffs that there is a risk of immediate, irreparable harm given the speed at which the Trump administration’s efforts unfolded.
“If the defendant is not prohibited, they will eliminate the agency before the law has the opportunity to decide whether to allow it to them,” Berman Jackson wrote.
The ruling was the latest in countless court decisions facing a Trump administration campaign to streamline the federal government, often through massive staffing cuts and removal of agencies and departments as a whole.
Earlier that day, Secretary of State Marco Rubio announced that he had informed Congress of plans to absorb the US Agency for International Development (USAID) into the State Department, and that he had put independent functions under enforcement control.
However, critics have questioned whether such an operation is legal. They argue that agencies such as the USAID and the CFPB were created as independent organisations under Congress, and that the president has crossed constitutional boundaries by negating Congress’ decisions.
In particular, CFPB has long been a target of conservative rage.
Founded in 2011, the bureau was founded in response to the 2007 financial crisis and was spurred by predatory lending practices.
As an independent institution, the CFPB acted as a watchdog, collecting investigations, monitoring financial markets, and serving as defensive complaints from ordinary consumers facing illegal or deceptive behavior from banks and financial service providers.
As of December 2024, the department had sought praise for repaying $21 billion to consumers through debt relief, reductions or monetary compensation arising from enforcement activities.
But many Republicans and financial industry leaders have accused them of challenging their enforcement and regulatory activities and hindering businesses.
On January 31, shortly after the start of his second term as president, Trump fired the director of the department, Rohit Chopra, and replaced it with an alliance.
By February 8, the department had been ordered to suspend all investigations, including pending investigations, and to suspend enforcement activities that fundamentally halt its functions. The next day, the headquarters was closed. The department also began to see the same widespread layoffs facing other federal agencies.
Judge Berman Jackson began the 112-page decision with quotes from some CFPB critics within the Trump administration.
“The CFPB has long been a weaponized institution that has been awakened to industry and individuals, and it has to be over.”
Another critic cited in Berman Jackson’s order was Elon Musk, Trump’s adviser and billionaire businessman.
“CFPB RIP,” he wrote briefly on February 7th. His government efficiency (DOGE) led the dismantling of the organization.
Musk has been accused of having a conflict of interest with the CFPB as it expands the financial services available on social media platform X.
Judge Berman Jackson emphasized at the beginning of her ruling that she did not underestimate her decision.
“An allegations to which a preliminary injunction is decided will be summarised in one question. Should the court take steps to preserve the Consumer Financial Protection Agency now before the case relating to its fate?” Berman Jackson wrote. “It’s an extraordinary step.”
Still, she showed that she needed an injunction. “The court’s oversight is the only thing that pulls the defendant back.”
Among the plaintiffs were the National Federation of Finance Staff and the National Association of Finance (NAACP), a well-known civil rights organization.
However, some individuals were named to the complaint. Rev. Eva Steig, 83-year-old Lutheran, sought help from CFPB on student loans that occurred at the seminary.
While investigating Steege’s case, the CFBP discovered that she was not only eligible for forgiveness for the loan, but also eligible for overpayment for $15,000.
According to the complaint, Steege was in hospice care at the time.
“What put the burden on her after her death was her desire to settle her debts and save her family,” Judge Berman Jackson wrote in her sentence.
However, the sudden closure of CFPB services left Steige awful without her case resolution or refunding for overpayment.
“Sweege’s fear of leaving her surviving family behind was in her student loan debt on March 15th, when she passed away,” the judge explained.
Berman Jackson said the incident raised questions about the separation of powers under the US Constitution and whether the president had invaded “legislative authorities.”
“The evidence reveals that. The defendant was in fact engaged in a coordinated and prompt effort to completely close the agency when an injunctive relief motion was filed,” she wrote.
“The President is free to propose laws to Congress to achieve this end, but the defendant cannot freely exclude the institutions created by the decree, and certainly not before the court has the opportunity to control the merits of the plaintiff’s challenge.”
She also highlighted what was called “dishonest” arguments from Trump administration lawyers.
“The courts have little confidence that defenses can be trusted to tell the truth about something,” the judge wrote.
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