(WASHINGTON) — A federal judge wants to hear directly from one of the top officials at the Consumer Finance Protection Bureau to learn if the Trump administration is unlawfully gutting the agency or just trying to streamline it.
U.S. District Judge Amy Berman Jackson — who expressed concern the CFPB might be “choked out of its very existence” — said she plans to hold a hearing next Monday to get testimony from CFPB Chief Operating Officer Adam Martinez and others about the state of the agency tasked with protecting American consumers.
During a lengthy hearing Monday, Jackson grew frustrated with a lack of clear answers from either side about the current state of the CFPB. Lawyers with the Department of Justice argued the relief requested by the federal unions who brought the lawsuit amounted to putting the CFPB into receivership, while the plaintiffs argued the Trump administration was causing irreparable harm by slowly starving the agency.
“According to the plaintiff, the sky is falling. According to the defendant, if I issue the order, the sky will be falling,” Jackson remarked.
Jackson is considering issuing a preliminary injunction to block the dismantling of the CFPB but added she might consider additional relief if the plaintiffs can demonstrate that the government’s actions are causing irreparable harm.
“I think what we’re talking about is interim oversight to make sure that it hasn’t been choked out of its very existence before I get to rule on the merits,” she said.
In a sworn court filing last week, Martinez argued the changes at the CFPB — which has operated under a stop work order for the last month — are simply a “common practice at the beginning of a new administration.” Jackson raised skepticism to the idea that what’s happening at the CFPB is business as usual.
“One of the big defenses of all this is that this is normal, that this is what happens when the new team comes to town, and I’m just not sure that’s true at all, at least not since I’ve been here,” she remarked. “Are you telling me that … when President Reagan took over from President Carter — on top of freezing regulations and enforcement and litigation — fired all provisional employees, shut the building, stopped all work and said the funding should stop?”
Lawyers with the Department of Justice insisted the Trump administration is trying to improve the CFPB, not destroy it.
“You can’t blow it up, but why should you be able to starve it to death?” Jackson asked.
“Acting Director [Russell] Vought wants to have a more streamlined and efficient bureau, not to blow it up,” responded a DOJ attorney.
Elon Musk, however, wrote “RIP CFPB” in a post on X on Feb. 7, the same day workers received termination notices.
The CFPB is an independent agency established by Congress after the 2008 financial crisis under the landmark Dodd-Frank Act. It’s a consumer watchdog aimed at protecting American households from unfair and deceptive practices across the financial services industry.
Its oversight applies to everything from mortgages to credit cards to bank fees to student loans to data collection. By law, the CFPB has the rare ability to issue new rules and to impose fines against companies who break them.
Since its establishment in 2011 through last June, the CFPB said it has clawed back $20.7 billion for American consumers.
ABC News’ Elizabeth Schulze contributed to this report.
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