A fragmented federal appeals court has given U.S. President Donald Trump enormous authority to kickstart mass firings at the agency Consumer Financial Protection Bureau (CFPB). This decision has raised significant fears about the agency’s future and its willingness to continue to protect consumers. The three-member appellate court found that the trial court had acted beyond its authority. It had previously stayed the dismissals, which had first been stayed in April after a March 2023 injunction.
The CFPB was established to ensure that American consumers’ interests are protected in the financial market. 1,500 workers are now in limbo about their employment situation. The trial court’s injunction aimed to prevent what it deemed an illegal purge of CFPB employees, arguing that such actions violated the rights of the workers and threatened the agency’s operational integrity. The ruling by the appeals court, made by Trump appointees Neomi Rao and Gregory Katsas, allows the administration to move forward with its plans, despite dissenting opinions from other judges.
Jennifer Bennett, an attorney representing the plaintiffs, told the Boston Globe that she is worried about the implications of this decision. She went on to stress that the CFPB is an incredibly important part of safeguarding consumers from financial abuse.
“Without the full force of the Consumer Financial Protection Bureau – an agency Congress created specifically to protect consumers – millions will lose critical safeguards against predatory financial practices. If this decision is allowed to stand, it will shift the balance of power toward corporations at the expense of American families’ financial security.” – Jennifer Bennett
The controversy surrounding the CFPB’s staffing comes amid broader scrutiny of the Trump administration’s actions regarding the agency. Congress’s Government Accountability Office and the Federal Reserve’s inspector general have opened investigations into these issues. Its critics, like former President Trump and tech billionaire Elon Musk, are calling for the CFPB to be abolished altogether. They claim that it curbs free market enterprise and acts outside its statutory authority.
In court proceedings, senior officials acknowledged plans to downsize the CFPB while maintaining some level of operation in compliance with legal requirements. During the hearings, advocates presented compelling evidence that past mass dismissals were overly expansive. This produced an extreme level of understaffing in every office at the CFPB. This alone has thrown up red flags about the agency’s capacity to carry out its required statutory duties.
The CFPB was explicitly established to address issues like predatory lending and defend consumers from exploitative financial practices. As mass firings move forward at the agency, observers worry that its mission to protect consumers will be all but gutted. Critics from conservative political and industrial interest groups have for years viewed the CFPB fundamentally as an obstacle to profitable business practices. They think it limits economic development.
Judge Patricia Millett, nominated by former President Barack Obama, articulated her dissenting opinion. She was unambiguous in her opposition during consideration of the D.C. Circuit ruling. She specifically rebutted the administration’s attempts to tear down the Bureau as a whole.
“But it is emphatically not within the discretion of the President or his appointees to decide that the country would benefit most if there were no Bureau at all.” – Judge Patricia Millett