Jacquelyn Martin/AP Photo
Judge Amy Berman Jackson has once again stopped Russ Vought and the DOGE team from firing virtually all of the Consumer Financial Protection Bureau staff. After a Thursday purge that terminated close to 90 percent of all CFPB employees, totaling 1,483 workers, and left it with a skeleton crew of 207 to carry out dozens of statutory obligations, Judge Jackson held a tense show cause hearing on Friday morning and issued an oral order saying the firing “is not happening today.” An evidentiary hearing has been set for April 28.
According to a declaration from an anonymous CFPB employee filed with the court on Friday, Gavin Kliger, a DOGE official detailed to the agency, managed the mass reduction in force (RIF). “He kept the team up for 36 hours straight to ensure that the notices would go out yesterday (April 17),” the employee, known by “Alex Doe,” stated. “Gavin was screaming at people he did not believe were working fast enough to ensure they could go out on this compressed timeline, calling them incompetent.”
In the hearing, chief operating officer Adam Martinez claimed to not know what Kliger’s involvement was with the RIF. He said that acting CFPB chief legal officer Mark Paoletta, a pal of Clarence Thomas’s, gave all instructions on the mass purge.
The CFPB was attempting to exploit a loophole opened by an appeals court allowing the agency to reduce its force, but only after a “particularized assessment” of each employee and whether the force reductions and stoppage of work would affect any statutory obligations. According to the Alex Doe declaration, individuals working on the RIF asked whether the particularized assessment was made, “but they were told that all that mattered was the numbers.” Mark Paoletta, according to the declaration, said that “leadership would assume the risk” of violating the court order.
The plaintiffs in the case released a document showing that, as recently as Monday, CFPB leadership was insisting that they were not seeking a reduction in force for the agency. The person in leadership who sent that email was in fact fired as part of the RIF.
Paoletta, for his part, issued his own declaration on Friday that offers a window into how this administration thinks about taking care that the laws are faithfully executed, the primary function of the executive branch. The particularized assessment, Paoletta claims, was carried out by him and two other CFPB attorneys, and they just look like a game of hacking down numbers. Here are some lowlights:
- The Consumer Response division, which maintains a complaint database that gets tens of thousands of consumer messages a day and must follow up with thousands of banks and other institutions, now has 16 people, because Paoletta said the Bureau “retains dozens of contractors” to do the job. This is typical conservative privatization. Each of the remaining people, per a declaration from someone who until the RIF was the chief of staff of Consumer Response, is “a manager of managers who does not carry out the day-to-day tasks that permit the Office to fulfill its mandatory statutory duties.”
- There is now one person at the Office of Fair Lending and Equal Opportunity, which monitors several federal laws for compliance across the entire country.
- Though an earlier memo from Paoletta stated that supervision would drop by 50 percent under his new priorities for the Bureau, he reduced the Supervision Division from 487 employees to 50, a reduction of nearly 90 percent. He also put all supervisors in the Southeastern region “due to proximity to headquarters and relatively lower cost of living.” Supervised entities are positioned all over the country.
- Paoletta also said in his priority memo that he would focus on actions that defraud service members. Yet the Office of Servicemember Affairs was reduced to one person. Though student loans were deprioritized, the Student Loan Ombudsman is a statutory position. That office now contains one person.
- The Office of Research does have three individuals, and according to a source that includes Jason Brown, who was designated to publish the APOR tables, a crucial piece of mortgage market machinery. But there is nobody left who knows the code that the APOR tables are calculated in or who has access to the folder where the tables are posted, according to the source.
After all that and more, Paoletta wanted credit that “the Bureau could have reduced beyond the levels it ultimately decided upon while still performing its statutory duties.” But any reasonable look at the situation shows that there is no way 207 people can fulfill the dozens of obligations CFPB has to the American people under statute. The assessment was also apparently not individualized, but based on slotting numbers to certain divisions and offices. Managers of the various divisions and offices were not consulted on the matter.
In the hearing, Judge Jackson displayed extreme skepticism that the agency could still perform its statutory obligations, as well as whether leadership could determine the levels of firing only three days after the appeals court order. “They do not seem to be based on particularized assessments,” she said.
This is why she called for an evidentiary hearing to get a factual basis established of what was done. “We’re not going to disperse 1,483 people into the universe and have them unable to communicate with the agency anymore until we determine whether that’s lawful or not,” Judge Jackson declared. Paoletta and Kliger are expected to be called as witnesses.
So for the next ten days at least, the CFPB is once again in limbo.
