A whistleblower's testimony reveals a potential attempt to defy a court order and rapidly dismantle the Consumer Financial Protection Bureau, raising questions about the administration's motives and the agency's future.
The future of the Consumer Financial Protection Bureau (CFPB) hangs in the balance as conflicting narratives emerge regarding the Trump administration's efforts to restructure the agency.
An employee, identified as Alex Doe, testified that plans to dismantle the CFPB were still actively being pursued, potentially contradicting claims made by the Justice Department.
Doe's testimony revealed that meetings were held as recently as last week to discuss implementing "Phase 2" of a plan to wind down the CFPB.
This revelation directly challenges the narrative presented by CFPB Chief Operating Officer Adam Martinez, Doe's supervisor, who suggested that efforts to dismantle the agency had been slowing down.
The CFPB, created in the wake of the 2008 financial crisis, has been a long-standing target for conservatives who view it as an example of government overreach. President Trump has made no secret of his desire to dismantle the agency, leading to the current legal challenges.
Martinez, testifying for the administration, acknowledged aggressive efforts by the Department of Government Efficiency (DOGE) to dismantle the agency in early February. However, he claimed that political appointees, specifically acting CFPB head Russ Vought and legal advisor Mark Paoletta, had slowed down these efforts by mid-February.
Judge Amy Berman Jackson expressed her concern about the conflicting testimonies and the overall "factual situation." While she hasn't decided on a preliminary injunction, she is seeking ways to allow the agency to "hobble" along during the litigation. Her stated goal? "I want to preserve an agency that could be revived, if necessary."
Doe testified that she was tasked with implementing mass layoffs on February 13, shortly after DOGE representatives arrived at the agency. The goal was to lay off 1,200 employees the following day, a move that would have required eliminating entire offices and units without considering their statutory obligations.
Doe emphasized that there was no discussion about whether the administration needed Congressional approval for these actions.
Doe's testimony painted a picture of frantic activity on February 14, the same day as the first court hearing on the legal challenge.
| Time | Action | | :------------ | :-------------------------------------------------------------------------------------------------------------------------------------- | | 30 minutes | Doe emailed Martinez suggesting they slow down work, given the pending court intervention. | | Before Hearing | | | Shortly After | Instead, Doe received instructions from another supervisor to speed things up. | | Agreement Reached in Court | The unions and the Justice Department reached an agreement, ratified by court order, to pause mass terminations. | | Evening | Doe was told to move forward with the layoffs despite the court order. She claims DOGE was pressuring the team to send out termination notices. |
Doe recounted her disbelief: "I said these [termination notices] cannot go out today and that I hope that Mark Paoletta knows how to read a court order." Despite the court order, work on the termination notices continued until 10 p.m., although they were ultimately not sent.
Martinez claimed he had no reason to believe the rush to complete the terminations was related to the court case, suggesting that DOGE simply wanted the layoffs done quickly. However, Judge Jackson questioned Martinez about the possibility of eventually moving the CFPB's functions to other agencies, to which he admitted he didn't know the "end goal" of the restructuring.
While the Justice Department highlighted that Paoletta had authorized the reactivation of CFPB work required by law, the ultimate fate of the agency remains uncertain. Doe's testimony raises serious questions about the administration's intentions and whether it attempted to circumvent the legal process to dismantle the CFPB. The court's decision will have significant implications for the future of consumer protection in the United States.