The federal judge in the National Treasury Employees Union’s case against Trump-era management of the Consumer Financial Protection Bureau said Tuesday she’s “leaning” toward issuing a preliminary injunction to keep at bay a plan to put the agency in “wind down mode.”
“I want to preserve an agency that could be revived, if necessary," Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia said Tuesday, according to American Banker. "I don't think we can have nothing.”
The comment capped two days of testimony, including from the CFPB chief operating officer credited with calling the Trump administration’s design for the agency “wind-down mode.”
In testimony, Adam Martinez, the bureau’s COO, likened the Department of Government Efficiency's Feb. 6 arrival at the CFPB to a "hostile takeover."
"The rapidness of the way that it was occurring was overwhelming," he said. "I now realize how much damage can be done within a couple of days to an organization."
Brad Rosenberg, a Justice Department attorney, aimed to highlight differences between DOGE’s objectives and those of the Office of Management and Budget officials, such as Russ Vought, who became the CFPB’s acting director, and Mark Paoletta, now the bureau’s chief legal officer.
"When the OMB directors came in, it felt like the adults were at the table," Martinez said in testimony Monday. "It became increasingly clear that there was misalignment between the DOGE people and the OMB people.”
Still, another witness – a CFPB official testifying under the pseudonym Alex Doe – told the court that bureau representatives discussed with the Office of Personnel Management, as recently as last Thursday, how to eliminate the CFPB and follow through on previously planned layoffs.
"No one has told me the plan has changed," Doe said.
Berman Jackson ordered the CFPB on Feb. 14 not to terminate any further employees for reasons other than cause until a later hearing. Evidence submitted late last week in the case detailed an effort by CFPB officials, including Martinez, to fire 1,175 of the agency’s employees in the hours before the judge could halt it.
Further evidence submitted Tuesday showed a March 1 Microsoft Teams exchange between CFPB employee Christopher Young and an unnamed recipient.
“Just trying to get a sense of our current status,” Young’s text reads. “Should the judge lift the [temporary restraining order] on March 3rd, are we prepared to implement the [reduction in force]?”
“A discussion with Mark P. is needed,” the reply reads, referencing Paoletta. “New guidance was issued a week ago from OMB re: how agencies should be approaching workforce reshaping.”
Berman Jackson, at one point, remarked “there's a lot of evidence that has been introduced that the same people who were sitting in a room talking about firing are still sitting in a room talking about firing.”
Comerica case will proceed
In another courtroom, a federal judge denied the CFPB’s move to pause its case against Comerica Bank. The agency sued the Dallas-based lender in December, alleging the bank “systematically fail[ed]” 3.4 million cardholders who received federal benefits such as Social Security through prepaid debit cards.
Since filing the suit, however, the CFPB has seen a stop-work order under new leadership, and has dropped lawsuits against Capital One, JPMorgan Chase, Bank of America and Wells Fargo.
Judge Jane Boyle of the U.S. District Court for the Northern District of Texas said Monday the bureau “failed to explain how staying this case would be in the interest of justice.”
“Because there is a fair possibility that staying the case will harm Comerica, the CFPB must identify some hardship or inequity from being required to continue litigating this case,” Boyle said. “The CFPB has failed to do so.”
Comerica, for its part, argued last week that a stay would “prolong the reputational harm the Bank has been forced to endure” due to the “meritless” lawsuit.
A spokesperson for Comerica declined to comment.
