The union representing Consumer Financial Protection Bureau employees said the Trump administration has illegally dismantled the agency by firing hundreds of employees, closing its Washington, D.C. headquarters, canceling leases and halting all legally required functions — all of which they say can only be done by an act of Congress.
On Thursday, the National Treasury Employees Union filed a reply memorandum in the U.S. District Court for the District of Columbia challenging the CFPB's actions under the Trump administration. The filing supports a motion for a preliminary injunction in its lawsuit against acting CFPB Director Russell Vought.
The union claims that Vought has violated the separation of powers, was
"These actions are not merely a policy shift or a routine transition; they represent an attempt, unprecedented in American history, to unilaterally eliminate an agency that Congress established and that the Supreme Court upheld last year," the union said.
The union has asked for a temporary restraining order to keep Vought from firing more CFPB employees en masse through a reduction in force and from deleting or removing any CFPB data. District Court Judge Amy Berman Jackson has scheduled a hearing for Monday on the injunction.
"No statute authorizes the defendants to stop the CFPB from doing what Congress said it must, and they have offered no reasoned explanation for their extraordinary efforts to wind down the agency," the union said in the memo.
The union also claims that Vought has not been seeking reform of the CFPB but has put a halt "to the CFPB's performance of its statutorily mandated functions." The Trump administration has tried to diminish the court case by portraying its actions as an employment dispute, the union argues, rather than being about dismantling the agency.
The CFPB's employees "face a laundry list of 'great' and 'irreparable' personal consequences — losing health coverage months after receiving multiple cancer diagnoses in the family, lost time with their newborn children, defaulting on mortgages, and the list goes on," the union said.
The legal memo includes 17 declarations from former CFPB officials, many of them disputing claims made by Adam Martinez, the CFPB's chief operating officer, who has been working with Vought to gut the agency, the union claims. Martinez wrote a declaration earlier this month supporting Vought's actions of firing employees, canceling contracts and shutting the agency's headquarters as part of an orderly transition that is common in a changeover in administrations. But CFPB officials who have been fired disputed his account.
"The events of the past few weeks are unlike anything I've ever seen at any agency during any change in administration (or at any other time)," wrote one contracting manager, Charlie Doe, who used a pseudonym out of fear of retaliation by the Trump administration.
"The instructions to contracting officers did not reflect a change in policy direction, but rather a wholesale termination of the contracts needed to keep the CFPB running."
The NTEU received amicus briefs in its support from 22 states and roughly
Erie Meyer, the CFPB's former chief technologist, said Martinez made false statements about the CFPB's operations. Security monitoring of the bureau's data is not being performed, she said in a declaration to the court, because the CFPB has canceled 32 cybersecurity contracts.
In addition, the CFPB has canceled more than 100 contracts supporting the bureau's work, including contracts for storing, maintaining and transferring data, including those that scrub the database of personally identifiable information on consumers and that enable consumer complaint information to be shared with the public, states, localities and other federal agencies.
All contracts for expert witnesses used in litigation have been canceled, an indication that the CFPB is planning to dismiss pending cases, experts said. Contracts for training examiners who supervise banks and for administering the test that employees must take to become examiners were canceled.
Among the most damning statements about the CFPB's leadership in the Trump administration was the declaration that contracts were terminated without consulting with the legal department, receiving and approving settlement costs and getting a vendor's signature.
"Defendants are systematically eliminating the Bureau's capacity to function at all," Doe wrote. "To my knowledge, the Bureau has not taken any efforts to preserve CFPB data that is possessed by vendors whose contracts are terminated."
Meyer also claims the CFPB has failed to comply with a Feb.14 court order requiring that the bureau preserve data. The CFPB's data includes the personal information of consumers and employees, as well as sensitive supervisory information about corporations. It is standard industry practice for contractors to delete any government data at the termination of a contract, she wrote.
"The rush to finalize the termination of the vast majority of the Bureau's contracts is very likely to cause irretrievable data deletion, and to impair the data and records that are not deleted," Meyer said.
The union alleges that Vought purposely deleted
"This disruption is not just a technical oversight; it is a direct risk to consumer protection efforts, as the Bureau's content is now being supplanted by potentially harmful, deceptive websites," Meyer wrote. "The rush to terminate the CFPB's contracts puts this data at serious risk of misuse or access by unauthorized parties."
The CFPB's databases need continuous maintenance, including virus scanning and security software to maintain audit logs, which ensure that if data is improperly accessed there is a forensic footprint that can identify who manipulated the data, she wrote.
The union's lawyers — Deepak Gupta, of the law firm Gupta Wessler, and Wendy Liu, of the Public Citizen Litigation Group — continue to argue that Vought was illegally appointed by President Trump "without the advice and consent of the Senate" and under the guise of the Federal Vacancies Reform Act, which permits temporary appointments.
Trump fired former CFPB Director
