A federal judge on Friday ruled that the Trump administration cannot fire Consumer Financial Protection Bureau employees without cause as the president attempts to "eliminate" the agency.
Several organizations are suing the Trump administration to prevent the potential closure of the agency.
The CFPB was created after the 2008 financial crisis to protect consumers from predatory loans, high interest rates and deceptive lending practices — such as complex fine-print agreements — that can lead to millions in fees.
The Trump administration has ordered workers and contractors of the CFPB to stop working, and attorneys who were leading litigation against big banks were ordered to stop those lawsuits.
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In an email, the administration expressed concern the CFPB has functioned as a “weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called 'elites.'”
But organizations like the National Consumer Law Center and the National Association for The Advancement of Colored People, are asking a federal judge in a lawsuit to issue an injunction to bar the administration from closing the agency.
The plaintiffs argue the agency was created by an act of Congress meaning only Congress has the power to eliminate it.
Plaintiffs also share stories of people who are now experiencing consequences because work has stopped or slowed down at the CFPB.
They mention an 83-year-old pastor who was given less than six months to live. According to the lawsuit, she is entitled to discharge her student loans under the Public Loan Forgiveness Program, but after a meeting with the agency was suddenly canceled, she’s now concerned that if her debt is not discharged before she dies, she could pass that burden on to her family.
“There are so many things that the CFPB regulates and pays attention to in junk fees and individual banks and how they're impacting consumers,” says Lisa Gilbert, co-president of Public Citizen, an organization that supports the lawsuit. “It's just not OK to remove a cop off the beat, particularly when the Trump administration ran on protecting regular people, lowering prices helping us with scams. You know, that's exactly what the CFPB is for.”
President Trump's attempts to gut the CFPB are part of a larger effort to reduce the size of the federal government.
