Another Trump Win: Court Rules President Can Indeed Dismantle Consumer Financial Protection Bureau

On Friday morning, a district court gave the Trump administration another win, reversing an injunction a judge had brought that had blocked the Trump administration’s attempt to dissolve the Consumer Financial Protection Bureau.

On February 1, President Trump removed CFPB director Rohit Chopra, who had ben appointed by the Biden administration. Acting director Russell Vought then ordered CFPB staff to halt all work and shut down its headquarters. That triggered a lawsuit from the National Treasury Employees Union — which represents most CFPB employees —along with other plaintiffs.

In late March, Judge Amy Berman Jackson in the U.S. District Court for the District of Columbia issued a preliminary injunction blocking the moves by the Trump administration.

“After briefly narrowing the scope of Jackson’s injunction, the DC Circuit panel reinstated the order shortly after the CFPB attempted a drastic reduction-in-force plan meant to slash the majority of the agency’s headcount,” Bloomberg News reported. “Lawyers for the Trump administration argued Jackson’s injunction was an overly broad encroachment on a federal agency’s efforts to downsize in accordance with the president’s policy directives.”

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But on Friday, the United States Court of Appeals for the District of Columbia Circuit ruled that Jackson’s preliminary injunction be vacated.

The Consumer Financial Protection Bureau, which is funded by the Federal Reserve, was authorized in 2010 by the Dodd-Frank Act. It has been exempt from congressional oversight throughout its existence and its funding is not determined by congressional legislators, making it the only federal agency with that standing.

In 2015, Investor’s Business Daily accused the CFPB of “diverting potentially millions of dollars in settlement payments for alleged victims of lending bias to a slush fund for poverty groups tied to the Democratic Party” and planning to “create a so-called Civil Penalty Fund for its own shakedown operations targeting financial institutions,” the Heritage Foundation has noted.

In October 2022, the U.S. Court of Appeals for the Fifth Circuit stated that the CFPB’s “perpetual insulation from Congress’ appropriations power, including the express exemption from congressional review of its funding, renders the Bureau ‘no longer dependent, and as a result, no longer accountable’ to the Congress and ultimately, to the people.”