Melissa Bender/NurPhoto via AP
A group of federal workers and supporters protest Elon Musk and DOGE outside of 26 Federal Plaza in New York, March 19, 2025.
For the second time in three months, acting Director of the Consumer Financial Protection Bureau Russ Vought has tried to fire most of the staff and cripple its functions. The union for CFPB employees has successfully beaten both attacks back, and a hearing today will determine whether the second effort will formally fail. (See the update; the hearing was canceled because the union was victorious, for now, in blocking the mass firing.)
Over the weekend, attorneys for the union issued 19 declarations from CFPB staff, most of whom received a termination notice in the mass reduction in force (RIF) on April 17. Not only do these declarations lay out exactly how Vought and his leadership team violated a court order; they go into detail on what it actually takes to run a federal agency in the modern age, including, ironically, the bureaucracy imposed by Congress on behalf of business interests.
The attempted purge of CFPB is not isolated, of course. Even as Elon Musk’s Department of Government Efficiency is crumbling, the systematic federal workforce destruction has left government unable to react to changing circumstances or carry out important functions. We have a unique window into this at CFPB, but you can extend it across virtually every agency, and better understand the breakdowns and errors to come.
VOUGHT’S TEAM FIRST TRIED to fire about 1,500 CFPB employees in February. U.S. District Court Judge Amy Berman Jackson issued a preliminary injunction to stop this. On appeal, the D.C. Circuit Court said that CFPB leaders could get rid of some employees and stop some work, but would have to undergo a “particularized assessment” to ensure that the agency could still carry out statutory obligations.
That appeals court ruling came down on a Friday. On Saturday, Vought sent an email entitled “CFPB RIF Work,” restarting the reduction in force. By the following Thursday, April 17, 1,483 positions were eliminated. A team led by DOGE lawyer Jeremy Levin, 28, and former Twitter intern Gavin Kliger, 25, actually carried out the terminations. Employees were given one day after the RIF before their work systems would be turned off. (That RIF is now on hold, pending the outcome of today’s hearing.)
The idea that a particularized assessment of every employee and statutory authority could be done in less than a week stretches credulity. The leadership team got key facts wrong in representations to the court, like misnaming what division the Office of Community Affairs sits in, suggesting that the process was less than meticulous. And attorneys who worked on the RIF literally copy-pasted from Google the results of a search for “CFPB organic statute” when asked what CFPB was required to carry out.
The declarations, mostly written by senior leaders in different divisions and offices of the CFPB, further show how Vought and company chose arbitrary head count numbers and “retrofitted” the RIF to reflect that number. None of these senior officers were consulted about the RIF, and many were themselves fired.
The systematic federal workforce destruction has left government unable to react to changing circumstances or carry out important functions.
For example, director of digital services Adam Scott was fired, along with 36 of the 37 members of his Design and Development team. The team conducts 33 different statutorily required operations, from the CFPB website to the consumer complaint database to the “Find a Housing Counselor” tool at the website. There’s no way a single staff member could be the entire IT team for a federal agency, maintaining and patching all its digital operations. But that’s what Vought and his deputy, chief legal officer Mark Paoletta, considered appropriate.
The same is true of management of the CFPB’s Civil Penalty Fund, the Office of Fair Lending and Equal Opportunity, the Office of Civil Rights (which is currently processing 22 equal employment opportunity complaints), and numerous others with one employee left, typically a manager without day-to-day expertise in all of the requirements of the office.
In other cases, even one person was deemed superfluous. The entire regulatory implementation and guidance team, close to 70 people, was eliminated. This team helps design required guidance for the financial industry on regulations and statutes. Danny Pham of the Office of Technology, the owner of several technology contracts that the CFPB relies on to store and maintain data, was let go in the RIF, and nobody else has the relationship with vendors to handle problems or increase data storage as needed. Nobody was left to collect and publish required data under the Home Mortgage Disclosure Act, and a director of Regulatory Technology said the platform would eventually break. The one individual left in the Office of Servicemember Affairs, a statutory position that protects military members from consumer fraud, took the “Fork in the Road” buyout and has no access to CFPB systems while on administrative leave.
The entire team of the chief privacy officer was let go, meaning that the agency could not comply with any statutory requirements around agency safekeeping of data. Agencies must have a designated Senior Agency Official for Privacy, per federal law. They also must have a Designated Agency Ethics Officer, a Senior Agency Information Security Officer, attorneys to represent the agency in federal employee grievances and administrative disputes, a team to work on rulemaking for the Financial Data Transparency Act, and an officer to manage ongoing compliance with the Paperwork Reduction Act, the Privacy Act of 1974, the E-Government Act of 2002, the Federal Information Security Modernization Act of 2014, and many more.
Some of these laws are simply roadblocks imposed by Congress at the behest of allies in corporate America who don’t like regulation. They force attention to details like small-business assessments and minimization of reporting requirements, and generally gum up the agency’s workings. It requires extra staff, some would say for pointless reasons. But if Russ Vought thinks the Paperwork Reduction Act, to pick one of these henpecking laws, is unnecessary, maybe get his Republican friends in Congress to nullify it. Otherwise, it exists, and has to be staffed, unless the goal is to destroy the agency entirely.
Meanwhile, all of CFPB’s statutory functions are supported by hundreds of contracts to manage call centers, software, antivirus protection, and data storage. All but one contracting officer was fired, and almost all of the associates with subject matter expertise in the particular procurements. Many of the contracts involving data would be at risk of deletion as those contracts expire, and invoices that fell through would lead to unnecessary penalties and interest payments. In fact, the Bureau is paying out in settlement costs and interest for the previous stop-work orders on contracts, costing money with a process allegedly intended to save money.
Even the divisions with larger staff numbers were effectively hobbled by the RIF. The Office of Consumer Response, which maintains the consumer complaint database, was knocked down from 125 to 16 employees. But that left no staff to monitor the toll-free call-in number, no staff to route complaints to companies or other regulators or congressional offices. There were 12 people left in the investigations section, but as Matthew Pfaff of Consumer Response declared, “If complaint intake and routing is broken … then for many complaints, the CFPB would not be able to monitor or investigate those complaints at all as statutorily required.”
Head count at the Office of Supervision was reduced by 90 percent, from 487 to 50, even after a memo of agency priorities from Paoletta said supervision examinations would be reduced by only 50 percent. But everyone on the data analytics team was fired, no new exams of regulated entities could be initiated—because the statute says that a risk-based assessment must be made prior to examination—and only the analytics team could pull and compile the data. Similarly, the team that produces the materials for exams, and writes the subsequent reports, were all fired too.
Of the 250 members of the Enforcement Division, 200 got a RIF notice, including all staff maintaining the whistleblower database. That means whistleblower complaints could not be taken in. The holders of the purchase cards to make expenditures were all fired, giving the division no ability to make travel arrangements, when courtrooms with active CFPB lawsuits are scattered all over the country. The technologists who support cases were let go, making data management impossible. Several cases would have had no ongoing staff; Paoletta did not respond to a request to keep at least one person from each active case. The Enforcement Division is holding 11 terabytes of data in its e-discovery system, but that contract actually expired last Thursday and the point of contact was fired; if the RIF went through, all of that data would have been lost.
One of the more interesting declarations comes from Jason Brown, head of the Office of Research. Of the 57 employees in the office, 54 got a RIF notice, everyone but Brown and two deputies. These three managers would have to write code to analyze third-party data, develop a methodology, perform cost-benefit analysis, establish infrastructure to legally store and maintain the data, and report findings. Statutory law dictates that existing rules must get formal retrospective assessments for effectiveness. New final rules must be analyzed to see if their annual impact exceeds $100 million, as well as a “regulatory flexibility” analysis under the Regulatory Flexibility Act and an economic burden analysis under the Paperwork Reduction Act (there’s that law again). It’s impossible for three people to carry the workload even if they had the technical expertise, which they don’t.
But not all of this is just bureaucratic box-checking. Some of the Office of Research’s obligations have enormous implications for mortgage markets. The office must update various regulatory thresholds to account for changes in the Consumer Price Index; if they don’t, what businesses can charge or what consumers can qualify for will be out of date. A weekly rate spread calculator mortgage lenders rely on to determine compliance has to be published as well.
And we’ve discussed before, the research office produces average prime offer rate (APOR) tables that must be calculated weekly. This is a tool so mortgage lenders know that the mortgages they offer are within a prescribed range to avoid ability-to-pay rules; if there’s uncertainty, the entire market could seize up.
First off, the data needed to calculate APOR is purchased through a third-party contract; that contract has to be maintained, and the chief representative for it was fired. Analysts have to comb through that data to calculate the results; Brown and the remaining staff if the RIF went through haven’t been trained to do that.
CFPB leadership has talked about outsourcing the entire calculation, which as noted is a regulatory tool, to the private company called ICE Mortgage Technology that supplies some of the data. Teams at CFPB have been discussing whether the statutory language that CFPB “must generate and publish APORs at least weekly” would be followed if the whole process were outsourced, and whether ICE could do subjective analysis while staying within bounds of the law. They’ve also been concerned about small volumes of data that have come from ICE to calculate APOR in recent weeks; CFPB supplements that with information derived from the Home Mortgage Disclosure Act, but if ICE had the responsibility that would not be possible. Where the data would live could also bring up legal issues, or how public agency code can be shared with a private company.
A good deal of work, in other words, has gone into figuring out how to outsource something that has gone off without a hitch for years, on the dubious assumption that this would save the agency money or add efficiency.
THE BOTTOM LINE IS THAT CFPB’s ability to supervise and enforce the law would be almost nonexistent, its ability to safeguard and maintain data degraded, and its ability to carry out what Congress asked it to carry out would be destroyed. “I don’t think we can keep operating even for 60 days without keeping many of these folks,” is what the agency’s chief information officer, Christopher Chilbert, said in a document produced by CFPB leadership.
The lessons are threefold. First, Vought and his allies are contemptuous of the law as it relates to CFPB, and will consistently do what they want if given even a tiny chance, regardless of their obligations. “The documents suggest that the defendants thought they could get away with firing the vast majority of the Bureau, as long as they left one warm body in each office explicitly identified by the Consumer Financial Protection Act,” as union attorneys wrote in their brief.
Second, this buildup of laws, most of them designed specifically to constrain regulatory activity, that federal agencies must comply with, requires a lot of manpower. It can be done, but not without caring about following the law. And maybe it could be streamlined. But that’s the job of Congress, and the enemy of that streamlining is the financial industry, in this case.
And third, this particular gang of Vought and DOGE is so zealous to make the nation safe for financial scammers and predatory lenders that they’ve wielded the axe in a way that is obviously unlawful, has been cited by the district court repeatedly, and will probably be cited again today. It’s good that CFPB’s employees have such persistent advocates that we can see this lunacy laid bare.
Even if saved from destruction, there isn’t likely to be any consumer protection going on at the CFPB through 2028. Vought and company have made that perfectly clear. But the hatchet job looks even worse in the details than what we all expected from the outside, and that’s valuable to know for when people are inevitably scammed and robbed, and are looking for whom to blame.
UPDATE: The conduct from Vought was apparently so uniquely awful that the appeals court restored the preliminary injunction that banned firings until the conclusion of the appeal in May. As a result, the district court vacated today’s hearing.
