At the headquarters of the Consumer Financial Protection Bureau, faint shadows above the entrance are all that remain of the letters that once spelled the agency’s name.
In the Trump administration’s broad dismantling of the federal government, the consumer bureau was one of the first agencies to fall, its offices shuttered and all 1,700 workers sent home. “CFPB RIP,’’ Elon Musk wrote on social media on Feb. 7.
But the consumer bureau has refused to die.
Last week, the agency’s consumer response team was called back to work to tackle a backlog of 16,000 complaints, including dozens from homeowners facing imminent foreclosures. The bureau’s Fair Lending Office has resumed preparing its annual report to Congress. And the front page of the agency’s website, which had generated a 404 error message starting on the day Trump officials arrived at the bureau, is working again.
The consumer bureau is emerging as a test case for the boundaries of Mr. Trump’s power to unilaterally hobble government agencies. For nearly a month, the bureau’s staff union and other groups have battled the Trump administration in federal court cases in Washington and Maryland, arguing that only Congress can formally close the bureau, which was created in the wake of the 2008 financial crisis.
A consent order and series of short-term agreements have temporarily halted, and in some areas reversed, what Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia described as Trump officials’ “shoot first and ask questions later” approach.
But Judge Jackson has yet to rule on the larger question of whether the Trump administration can essentially end the bureau by hollowing out its operations, even if it technically stays open.
The functions that have been restored are only a fraction of the agency’s total workload, but consumer advocates and the agency’s workers see these court orders as important victories in the broader effort to resist Mr. Trump’s dismantling of federal agencies.
Trump officials have made similar sweeping moves at the United States Agency for International Development and, most recently, at the Education Department.
For years, the financial industry has complained that the consumer bureau, which regulates a range of lending activity from mortgages to credit cards, has been overly aggressive, tying up companies in litigation and red tape and hindering credit from flowing to consumers.
Now, the battle to save the bureau has created some strange bedfellows. Mortgage lenders, which have historically been one of the groups that bristled at the bureau’s oversight, have also pushed for the agency to not be shuttered, at least without careful planning, according to three people familiar with internal discussions at the bureau.
The past month has played out like a cat-and-mouse game between the Trump officials seeking to kill the bureau and workers trying to carry out the agency’s legally mandated duties, according to a review of internal bureau emails, court testimony and interviews with eight current and former employees, who asked not to be identified so they could discuss sensitive agency information.
The Trump administration began moving against the bureau on Friday, Feb. 7. That evening, Russell T. Vought — a Project 2025 author who said in 2023 that he wanted to shut down agencies and leave their employees “traumatically affected”— was named the bureau’s acting director.
Over the next few days, Mr. Vought instructed employees to “stand down from performing any work task” and ordered the termination of nearly 200 contracts with vendors that provide vital pieces of the agency’s infrastructure like software for tracking legal cases as well as the contract with the staffing agency that employed the entire team of customer service agents who answered its consumer complaints hotline.
But almost immediately, Mr. Vought’s attempt at a complete shutdown ran into a roadblock related to an arcane feature of the mortgage industry.
The consumer bureau is responsible for compiling a key mortgage interest rate released each week. Because lenders need that rate to certify that their loans are in compliance with safe-lending rules, the mortgage market would freeze if the bureau abruptly stopped publishing it.
And so the agency’s new leaders allowed employees to restart that function.
It was an early lesson for the Trump administration that shutting down an agency that is deeply woven into American’s financial industry infrastructure is a tricky task.
When Congress created the consumer bureau in 2011, lawmakers assigned it more than 80 specific duties. They include responding to consumer complaints, running dedicated offices to serve military service members and student loan borrowers, and enforcing federal laws governing mortgage lending disclosures, fair access to credit and other consumer protections.
Because they could not legally close the bureau, Trump officials focused on gutting it. Employees were told by their new leaders that the bureau would survive “in name only,” several said in court filings. One senior executive was quoted in the filing as saying the bureau would be reduced to “five men and a phone” stashed in a room somewhere in Washington.
On Thursday Feb. 13, the bureau’s new leaders sought permission from the Office of Personnel Management to waive the usual 60 days’ notice required for government layoffs.
The personnel office had never before granted that kind of exception, bureau employees involved in the process testified in court. But just 10 minutes after the bureau sent its request, the personnel office approved its plan to cut an estimated 1,175 workers — the vast majority of its employees.
The purge would have wiped out every single employee in several divisions, including the agency’s supervision, enforcement and research units.
Aware that the agency was in a race against the clock, Deepak Gupta, a lawyer for the bureau’s union, sought a restraining order in federal court to prevent the employee terminations.
At 2 p.m. on Friday, Feb. 14, Judge Jackson was scheduled to hold a hearing on Mr. Gupta’s request. Fifteen minutes before the hearing was set to begin, Trump officials emailed the personnel office an urgent request for the final paperwork needed to carry out the layoffs.
In court that afternoon, Mr. Gupta pressed the judge to freeze the mass termination.
“I don’t want to leave the courthouse without some assurance,” he said. “I’m asking that they don’t fire the entire agency tonight.”
Judge Jackson approved a consent order pausing the layoffs. Since then, she has been monitoring whether the Trump officials were addressing the 80-plus tasks Congress had explicitly assigned to the bureau.
At times, Judge Jackson has called out Mr. Trump’s officials for sending contradictory messages.
One worker described receiving an email from Mr. Vought’s team directing employees to continue “statutorily required work” — then getting a text message from his manager, on his personal phone, saying, “Stand down until further notice.”
“We can’t have edicts issued with people’s fingers crossed behind their backs,” Judge Jackson, honing in on those exchanges said at a hearing on March 3.
Each week, dozens of workers from the bureau have packed Judge Jackson’s courtroom to watch the proceedings, occupying every available bench and crowding into an overflow room. Some scribble down notes so they can relay the latest developments to colleagues following along on group chats.
“We were there to bear witness,” said Catherine Farman, a web developer at the bureau and the president of the agency’s staff union.
Judge Jackson could ultimately lift the temporary freeze on the mass firings, reversing many of functions that have been restarted. The next deadline for extending or ending the pause is scheduled for March 28.
Trump officials are getting prepared if Judge Jackson rules in their favor.
Adam Martinez, an operating official at the bureau carrying out Mr. Vought’s mandates, said in court on Tuesday that the stop-work order and blueprints for a mass layoff have not been rescinded. Planning meetings for the staff purge, another bureau official testified, were held as recently as March 6.
