The CFPB's life is on the line (again)
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A hearing Tuesday in federal court in Washington could determine the fate of the embattled Consumer Financial Protection Bureau.
The big picture: Dismantling the agency puts the stability of the financial system at stake, former officials and consumer advocates say.
- The CFPB is responsible for key pieces of the mortgage lending process, which ensure the smooth functioning of the housing market.
- Without the agency, Americans will have less protection from financial fraud.
Catch up quick: Earlier this month, the White House fired about 90% of the agency's workforce, effectively gutting it.
- The move was challenged in federal court, and Judge Amy Berman Jackson blocked layoffs ahead of the hearing.
- Some of the Trump administration's other actions targeting the CFPB had already been knocked back by Jackson.
Where it stands: Both sides of this case filed a flood of documents over the weekend that led her to postpone the hearing to Tuesday from Monday.
- Mark Paoletta, the chief legal officer at the CFPB, defended the Trump administration's actions: "An approximately 200 person agency allows the Bureau to fulfill its statutory duties."
The other side: The plaintiffs, represented by the National Treasury Employees Union, filed 19 declarations from CFPB employees, who say it is not possible for 200 people to fulfill the agency's statutory duties.
- They say the White House and DOGE did not take care in engineering these cuts, that senior leaders were not consulted about the impact of terminations, and that if the job cuts had not been paused their offices would not have been able to do their work.
Zoom out: Eliminating the bureau has been a goal of conservatives for some time, explicitly delineated in Project 2025.
- The principal author of that plan, Russell Vought, heads the Office of Management and Budget and serves as the CFPB's acting director.
- The agency's legitimacy was upheld by the Supreme Court in a case decided a little less than a year ago.
What to watch: The Senate has put off a vote to confirm President Trump's nominee to lead the agency, Jonathan McKernan.
- By the time he takes that role, there may be a lot less work for him to do.
