A federal judge in Washington agreed Friday to temporarily halt a union lawsuit that had been trying to prevent the Trump administration from effectively shutting down the nation’s top consumer financial watchdog agency.
U.S. District Judge Amy Berman Jackson issued the pause, with both sides agreeing to revisit the case after the Senate decides whether to confirm Brian Johnson — a Capital One senior executive — as the new director of the U.S. Consumer Financial Protection Bureau, according to court records.
Current agency leadership had argued that Johnson should be given the opportunity to weigh in on a proposed mass layoff plan that the administration has spent more than a year fighting to implement. That plan, unveiled in April, would shrink the CFPB workforce to just 556 employees — fewer than one-third of the staff the agency had when President Donald Trump first took office. The proposal would eliminate 80% of positions in the enforcement division and 85% in the supervision division.
In her Friday order, Judge Jackson directed both parties to notify her within two days if the Senate votes to confirm Johnson as director.
Johnson, a Republican who previously held a senior role at the CFPB, is expected to take over from Russell Vought, Trump’s budget director who has been serving as acting CFPB head. Vought had publicly stated his intention to abolish the agency entirely and is legally required to step down at the beginning of August.
A federal appeals court last month cleared the way for Judge Jackson to consider lifting a preliminary injunction she had previously put in place, which barred the administration from carrying out mass firings at the CFPB while courts determine whether such action is legal. Friday’s order puts that process on hold for now.
In a joint court filing, both sides stated that if Johnson is confirmed, he should be allowed to review the layoff plan and, in their words, “decide whether he would like to pursue it.”
The CFPB was established by Congress in the aftermath of the 2008 financial crisis, with a mission to crack down on predatory lending and oversee consumer financial industries that played a central role in that economic collapse.
Trump and other administration officials have called for the agency to be eliminated altogether, arguing it engages in politically motivated enforcement and places excessive burdens on businesses. Consumer advocates have pushed back strongly against that position, calling it an unlawful benefit to politically connected corporations that puts ordinary Americans at risk.
