In a significant move that marks his latest rollback on regulatory agencies, former President Donald Trump has initiated a series of steps aimed at dismantling the Consumer Financial Protection Bureau (CFPB), raising alarm among federal employees and watchdog organizations. Over the past week, under Trump’s direction, operations at the CFPB have been abruptly halted, its headquarters shuttered, and the flow of funding ceased.
Jonathan McKernan stepped into the role of acting director of the CFPB this past Tuesday. Since his appointment, much to the concern of labor representatives and lawmakers, the bureau has terminated over 100 employees. This includes approximately 70 new or probationary staff members, as well as a larger group hired on two or four-year terms. Prior to these events, the CFPB had about 1,700 employees on its payroll.
In response, federal trade unions quickly took legal action, securing a court intervention this Friday. The resulting judge’s consent order has temporarily paused any further dismissals at the CFPB, stipulating that employees cannot be removed for reasons not directly related to job performance or conduct. Moreover, the consent order bars any attempts by the bureau to reroute its existing funds, primarily sourced from the Federal Reserve system, emphasizing that financial oversight and allocations are the prerogatives of Congress.
The CFPB, along with the city of Baltimore and the Economic Action Maryland Fund, had already succeeded earlier in the week in pushing through a preliminary injunction to stall any imminent efforts by the Trump administration to disrupt the bureau’s financial support or operations.
Data integrity and security at the CFPB have also surfaced as a critical concern following the administration’s actions. Recently, employees from the Department of Oversight and Government Ethics (DOGE) began accessing CFPB records, sparking widespread fears about potential data loss or misuse. According to Eric Meyer, the CFPB’s former chief technologist, there is an imminent danger that key databases containing twelve years of crucial CFPB records may be at risk of being wiped or transferred illegitimately. Meyer has expressed his anxieties through a formal declaration intended to alert the court to these risks, emphasizing the severe impact their loss would have on the public.
This unfolding situation at the CFPB mirrors broader trends under the Trump administration, reflecting a pattern of reducing the scope and scale of governmental regulation and oversight. The actions taken to pare down the bureau have been met with significant resistance, highlighting ongoing debates about the balance between executive power and legislative oversight in funding and operating federal agencies.
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