Judge blocks Trump effort to shutter Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB), an independent government agency tasked with examining and preventing financial malpractice, has been ordered by a federal judge to end its efforts under President Donald Trump.

The bureau was prevented from being closed while court proceedings continue, according to US District Judge Amy Berman Jackson’s request for a preliminary injunction from employees, advocates, and union representatives on Friday.

In her order, the judge wrote, “The Court cannot look away, or the CFPB will be completely dissolved and dismantled,” with the exception of “the court cannot look away.”

Given the rapid nature of the Trump administration’s efforts, she concurred with the plaintiffs that there was a risk of immediate, irreparable harm.

Before the Court has the opportunity to decide whether the law permits them to do it, the defendants “will eliminate the agency” according to Berman Jackson. &nbsp,

The Trump administration’s campaign to streamline the federal government, often through extensive staffing cuts and the elimination of entire agencies and departments, had just recently received its most recent ruling in the myriad court cases.

Secretary of State Marco Rubio even earlier announced that he had informed Congress of plans to rename the US Agency for International Development (USAID) and give its independent functions executive control.

However, some people have questioned the legality of these maneuvers. They contend that the president overstepped his constitutional bounds by overriding congressional decisions, and that USAID and the CFPB were established as independent entities under the control of Congress.

Conservatives have long been angry with the CFPB in particular.

The bureau was established in 2011 as a result of the bureau’s response to the 2007 financial crisis, which was fueled by predatory lending practices.

The CFPB served as a watchdog by collecting data from banks and financial service providers, conducting research, monitoring financial markets, and responding to complaints from regular people who had received deceptive or illegal information from their banks or financial services providers.

The bureau had already claimed credit as of December 2024 for recouping $ 21 billion in consumer debt through debt reductions, settlements, or other financial compensation from its enforcement actions.

However, many Republicans and leaders in the financial sector have criticised the bureau’s enforcement and regulatory practices, accusing them of stifling businesses.

Trump made a move to replace Rohit Chopra, the bureau’s director, with an ally on January 31 shortly after the start of his second term in office.

By February 8th, the bureau had been given the order to end all investigations, including those that were pending, and to completely stop any enforcement activities that had been fundamentally halting its functions. Its corporate headquarters closed the following day. The bureau also began to notice similar, frequent layoffs affecting other federal agencies.

Judge Berman Jackson quoted a number of the CFPB’s critics from the Trump administration to begin her 112-page decision.

“For a long time, the CFPB has been a wakening and weaponized agency against marginalized businesses and individuals.” Under Trump, Office of Management and Budget director Russell Vought called for an end to this.

Elon Musk, a Trump adviser and billionaire businessman, called on Berman Jackson to “delete” the bureau, adding to the list of critics in Berman Jackson’s order.

On February 7, he succinctly wrote, “CFPB RIP,” as his Department of Government Efficiency (DOGE) orchestrated the organization’s destruction.

As he expands the financial services offered on his social media platform X, Musk has been accused of having a conflict of interest with the CFPB.

In the first sentence of her decision, Judge Berman Jackson emphasized that she did not take her decision lightly.

Should the Court intervene now before the case involving its fate has been settled, according to the preliminary injunction to be decided? The writing of Bernard Jackson That is an extraordinary move, they say.

She did not deny that the injunction was necessary because, she said, “The Court’s oversight is the only thing that prevents the defendants.”

The National Treasury Employees Union and the renowned civil rights organization NAACP were among the plaintiffs.

Reverend Eva Steege, an 83-year-old Lutheran pastor who requested financial aid from the CFPB for student loans she took while attending seminary, is named in the complaint as well.

The CFBP discovered that Steege had qualified for both overpayments of $15, 000 and loan forgiveness when she was investigating her case.

Steege is currently receiving hospice care, according to the complaint.

In her decision, Judge Berman Jackson wrote that “her hope was to pay the debt and spare her family that burden after she passed away.”

Steege was left in a bind by the CFPB’s sudden suspension, which prevented her from receiving a verdict on her case or recovering her overpayment.

The judge explained that Steege’s fear of leaving her surviving family members saddled with her student loan debt “came into effect on March 15 when she passed away.”

According to Berman Jackson, the case raised concerns about the US Constitution’s “legislative authority” separation and whether the president had violated it.

When the defendants filed for injunctive relief, the evidence revealed that they were actually working together to shut the agency down completely, she wrote.

The defendants are not free to dissolve an agency created by statute on their own, and not before the Court has had the opportunity to decide on the merits of the plaintiffs’ challenge, despite the President having the authority to do so through Congress.

She also brought up the lawyers for the Trump administration’s “disingenuous” arguments.

Source: Aljazeera