The Trump-appointed leadership of the Consumer Financial Protection Bureau (CFPB) is reportedly planning to lay off nearly all of its 1,700 employees while “winding down” the agency, according to testimony from federal workers.

In statements released late Thursday, employees detailed discussions in meetings this month with senior CFPB officials and members of Elon Musk’s Department of Government Efficiency (DOGE), where the large-scale layoffs were outlined.

“My team was directed to assist with terminating the vast majority of CFPB employees as quickly as possible,” said an employee identified as Alex Doe, a pseudonym used for protection against retaliation.

According to Doe, CFPB leadership and DOGE planned a phased approach to downsizing. The first stage involved cutting probationary and term employees. Next, roughly 1,200 more workers would be laid off, leaving only a small fraction of the original staff.

“Finally, the Bureau would ‘reduce altogether’ within 60-90 days by terminating most of its remaining staff,” Doe stated.

The testimony arrives at a critical moment for the CFPB, which was originally established to safeguard consumers following the 2008 financial crisis, a crisis partially fueled by reckless lending practices. Since DOGE officials arrived at the CFPB this month, the agency has closed its Washington headquarters, started the initial wave of job cuts, and instructed remaining employees to halt nearly all operations.

These filings were submitted in response to a case brought by a CFPB union, which successfully paused acting Director Russell Vought’s efforts to dismantle the bureau. The layoffs of around 200 probationary and term employees were temporarily halted pending a hearing scheduled for Monday.

The documents highlight a significant contrast between Vought’s public statements and the internal developments at the agency.

“CFPB leadership has also been apparently lying to us that it will allow us to follow the law and our statutory obligations to protect consumers,” said a current CFPB employee, who requested anonymity due to fear of retaliation. “Those of us employed at the CFPB will not stop fighting for our right to get back to the work of protecting consumers that Congress has required of us.”

In a motion filed Monday, Vought disputed claims that the CFPB was being dismantled entirely.

“The predicate to running a ‘more streamlined and efficient bureau’ is that there will continue to be a CFPB,” he wrote.

However, testimony from CFPB employees suggests that the administration’s objective was to reduce the agency to its barest legal minimum. Under this plan, only five employees would remain, either as part of an independent office or merged into another regulatory body.

Between February 18 and February 25, employees were reportedly informed by senior executives that the CFPB would be reduced to just the five legally required positions.

“One Senior Executive said that CFPB will become a ‘room at Treasury, White House, or Federal Reserve with five men and a phone in it,’” said an employee identified as Drew Doe.

Workers stated that if required by the court, they would submit their names and titles under seal.

SOURCES - https://www.courtlistener.com/docket/69624423/38/1/national-treasury-employees-union-v-vought/

Last modified: March 1, 2025