A judge has temporarily prevented the administration from firing Consumer Financial Protection Bureau employees.
House Democrats have filed a proposed amicus brief in Maryland to support a lawsuit seeking to block the pause President Donald Trump’s administration placed on activities at the Consumer Financial Protection Bureau (CFPB).
Submitted to a federal judge on Feb. 28, the brief argues that the administration’s actions violated the Constitution’s separation of powers, as well as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which set up the CFPB.
“Not only do those efforts violate our law and constitutional structure, they also threaten the consumers the CFPB was created to protect—and has protected since its creation a decade and a half ago,” according to a brief from Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, and 202 others.
On Feb. 28, a federal judge granted the members’ request to file an amicus brief, which was joined by House Democratic Leader Hakeem Jeffries (D-N.Y.) and House Judiciary Ranking Member Jamie Raskin (D-Md.).
Earlier in February, Office of Management and Budget Director Russ Vought took over as acting director at the bureau, which faced scrutiny from one of Trump’s top advisers, Elon Musk. In two separate posts on social media, Musk wrote, “Delete CFPB” and “CFPB RIP.”
Vought has paused funding for the organization and ordered the closure of the bureau’s headquarters in Washington.
The Democrats’ brief came as part of a lawsuit brought by the National Treasury Employees Union, which it said in a Feb. 9 complaint included CFPB employees. The group filed a separate lawsuit on the same day over Musk’s Department of Government Efficiency receiving access to the bureau’s records.
U.S. District Judge Amy Berman Jackson issued a temporary order on Feb. 14 preventing the administration from, among other things, deleting data and firing CFPB employees “except for cause related to the specific employee’s performance or conduct.”
In their brief, Democrats said Vought prevented the bureau “from performing its various statutorily mandated responsibilities, like supervising banks and nonbanks.”
They added that “without the Bureau serving as a watchdog, financial institutions will be emboldened to engage in unfair, deceptive, and abusive practices in violation of consumer protection laws—hurting consumers, placing smaller banks that remain subject to regulation by other agencies at a competitive disadvantage, and creating the kind of market instability that Dodd-Frank was designed to prevent.”
The organization, set up to address concerns following the 2008 financial crisis, has been the subject of major Supreme Court cases over the nation’s separation of powers. Last year, a majority on the court upheld the bureau’s controversial funding mechanism whereby the director determines an amount the bureau draws from the Federal Reserve.
In a 2020 case, Seila Law v. CFPB, a majority of the court said the bureau’s structure violated the Constitution by requiring the director only be removed by the president “for cause.” It nonetheless allowed the bureau to continue to function, stating that the director’s removal protection was severable from the law that set up CFPB.
On Feb. 24, the Trump administration pushed back on the idea that it was violating the Constitution’s separation of powers.
“In any event, the Supreme Court has long recognized that agencies can permissibly decide what enforcement and supervision actions to take, if any, consistent with the statutory duties imposed on the agency by Congress,” the Department of Justice said in a brief.
Reuters contributed to this report.