The Consumer Financial Protection Bureau must temporarily rehire dozens of probationary employees it fired last month, a federal judge in Maryland ruled Thursday.
The terminations were unlawful because the government gave no advance notice before firing the employees and conducted no individual performance-based assessments to justify their dismissal, Judge James Bredar, of the U.S. District Court for the District of Maryland, found.
The bureau is one of 18 agencies for which the judicial order applies – but the temporary restraining order lasts 14 days.
Still, the National Treasury Employees Union – which sued the CFPB in a separate case – saw the decision as a victory.
“The judge rightly recognizes the [Department of Government Efficiency] mass firings as illegal [reductions in force], and that agencies must right these wrongs for employees caught up in Elon Musk’s attacks on public services,” Cat Farman, a union chapter president, said in a press release seen Friday by Banking Dive. Farman is listed on LinkedIn as a web developer for the CFPB.
In the same Maryland federal court, however, another judge on Friday denied the city of Baltimore’s request for a preliminary injunction to prevent CFPB leadership from returning the bureau’s reserve funds to the Federal Reserve or the Treasury Department.
On his first full day leading the CFPB, Acting Director Russ Vought wrote the Fed to indicate that the bureau would not take any unappropriated funding for the fiscal quarter starting in April.
Vought asserted that the $711.6 million in CFPB funds as of Jan. 31 was sufficient to operate a more “streamlined” agency, he wrote in the Feb. 8 letter. He further broke that down to $412 million in unobligated funds to be used as an operational budget, $220 million to be set aside for reserves and a $192.3 million balance.
In his ruling Friday, Judge Matthew J. Maddox wrote that the plaintiffs failed to show that CFPB leaders had “made or acted upon a decision to transfer away the funds presently available to it.”
“For the Court to intervene and entangle itself in the Bureau’s administrative processes before the agency has made any final decision about the disposition of its operating and reserve funds — and without clear indication that an unlawful and injurious decision will be made imminently — would exceed the bounds of the Court’s proper role and jurisdiction,” Maddox wrote.
Attorneys representing the CFPB said last month the agency hadn’t taken official action to defund itself, Bloomberg Law reported.
Adam Martinez, the CFPB’s chief operating officer, said in a Feb. 11 email that the bureau had contacted the Fed to see how it could return money, according to court documents. Ultimately, the bureau couldn’t find a mechanism to return the reserve funds, Maddox wrote, citing internal emails submitted as evidence.
