In its ongoing effort to reduce the size and power of the U.S. Consumer Financial Protection Bureau, the Trump administration announced that it has developed a new plan to slash the agency’s workforce by about two thirds, backing off earlier efforts to get rid of nearly 90% of all employees, Reuters reported, citing court documents.
In a filing submitted Tuesday evening to the U.S. Court of Appeals for the District of Columbia Circuit, the Justice Department said the plans showed the administration will not shut down the CFPB entirely, as a lower court had found they planned to do.
CFPB representatives did not immediately respond to requests for comment from Reuters.
Under the new plan, the CFPB workforce would fall to 556 workers, fewer than a third of its size when Trump took office. The new plan would eliminate 85% of positions in the Division of Supervision, which oversees the conduct of banks and nonbank financial companies offering consumer services, and 80% in enforcement.
The Justice Department said a lower court should be allowed to consider lifting a stay that currently blocks the administration from carrying out this plan, Reuters reported.
Continuing Court Battle
The administration had battled in court until now for permission to eliminate almost all CFPB positions.
That would be illegal lawyers for an employee union and others have argued and would prevent the agency from fulfilling duties mandated by Congress, which created the CFPB in 2010.
Trump and other top officials had called for the CFPB’s outright elimination, accusing it of politicized enforcement and unduly burdening companies, something advocates had rejected as an illegal giveaway to politically connected corporate actors that would jeopardize the public.
Tuesday’s motion would pause a pending appeal before the full bench of the appeals court, where judges had appeared skeptical of administration arguments that courts do not have the power to block the government from firing virtually all CFPB workers.
Last year, the administration attempted to defund the agency only to have a federal judge rule that it must continue to seek funding.
The administration argued that because the CFPB is funded by money from the Federal Reserve, and because the Fed technically is operating at a loss, there are no valid funds to support the CFPB.
Judge Rejected Argument
Judge Amy Berman Jackson rejected the administration’s argument, writing that this “would be tantamount to closing what is left of the Bureau.” The ruling upholds an earlier injunction from Jackson to ensure the agency would continue to exist as congressionally mandated, and to stop efforts to shutter the agency, including via layoffs.
Also, last year a coalition of 21 states and the District of Columbia joined together for a lawsuit to prevent the defunding of the agency. They argued that the administration was too narrowly interpreting which Fed funds can be used to support the agency — that they don’t have to be profits.
In January, the Acting Director of the Consumer Financial Protection Bureau (CFPB) requested a $145 million transfer from the Federal Reserve to fund the agency for the second quarter of fiscal 2026.
The request on Jan. 9 by Russel Vought comes after the judge’s order that CFPB funding cannot lapse and kept the agency afloat and operating despite the administration’s efforts to shrink the CFPB.
