A federal judge has issued an injunction pausing the Trump administration’s plan to dismantle the Consumer Financial Protection Bureau (CFPB), a move that had already resulted in layoffs and operational halts across the agency.
The ruling by U.S. District Judge Amy Berman Jackson comes in response to a lawsuit filed by a coalition of employee unions, civil rights groups, and individual plaintiffs. They argue that the executive branch overstepped its authority by attempting to dissolve an agency that was created by Congress.
The court’s decision prevents further staff terminations and directs the administration to maintain CFPB operations while the case proceeds. The agency has been ordered to reinstate dismissed employees, resume paused investigations, and preserve internal records.
The CFPB, created in the wake of the 2008 financial crisis, monitors consumer complaints, enforces financial regulations, and investigates potential misconduct by banks and lenders. In recent months, however, the agency had been the subject of restructuring efforts from the Trump administration, including the removal of its director and widespread cutbacks.
One of the driving forces behind the push to dissolve the CFPB has been Elon Musk, who currently heads the Department of Government Efficiency (DOGE). Musk has publicly called for the agency’s elimination, and DOGE representatives were reportedly involved in the early shutdown activities at the bureau’s headquarters.
During court hearings, lawyers for the plaintiffs pointed to confusion inside the agency, where employees received conflicting instructions about whether to continue their duties. Witnesses described abrupt leadership changes and suspended investigations, raising questions about the administration’s intentions.
In her ruling, Judge Jackson criticized the inconsistent explanations from agency officials and emphasized the need for judicial oversight to prevent irreversible consequences. She also referenced a case involving a terminally ill woman who had sought help from the CFPB for student loan issues but passed away before her matter could be resolved due to the agency’s halt in operations.
The administration had argued that the president has the right to reshape federal agencies, but critics counter that eliminating a body created by Congress exceeds constitutional limits. Legal experts expect the case to continue for several months.
Supporters of the CFPB—including consumer advocates and lawmakers who helped establish the agency—have welcomed the court’s decision. Senator Elizabeth Warren, who played a key role in founding the bureau, called the ruling a necessary step to maintain consumer protections.
For now, the CFPB will remain operational while the legal case proceeds. A final decision on the administration’s authority to restructure or eliminate the agency will be made at a later date.
Image is licensed under the Creative Commons Attribution 4.0 International license and was created by G. Edward Johnson.
