CFPB to issue mass furlough by year's end and transfer outstanding cases to DOJ

The Consumer Financial Protection Bureau will furlough much of its workforce on Dec. 31 and transfer remaining litigation to the Justice Department, officials told staff on Thursday. 

The decision comes after the Trump administration recently announced it would no longer draw funds from the Federal Reserve to support operations, which serves as the statutory funding mechanism for the agency. Previous Trump administration efforts to lay off virtually all CFPB employees and essentially close the agency have been held up in federal court for most of the year. Federal agencies are prohibited from issuing layoffs through January as part of the funding measure that ended the government shutdown earlier this month. 

The Justice Department in September stood up an Enforcement and Affirmative Litigation Branch within its Civil Division, which Mike Salemi, acting head of CFPB enforcement, told staff was where he assumed the agency’s work would be housed starting in 2026. He said he was not privy to all the plans, though he noted the information he did have came from Victoria Dorfman, an Office of Management and Budget associate general counsel who is also serving as a senior legal advisor at CFPB. 

Salemi said his understanding was all CFPB employees would be furloughed at the end of the year. The 170 employees in his division were definitely slated for the unpaid leave designation, he said. Other CFPB employees had not received an indication they would be furloughed as of Thursday evening. 

Cat Farman, president of the CFPB union represented by the National Treasury Employees Union, said the administration's move was unlawful and would undermine the bureau's work. 

“This is Russ Vought’s latest illegal power grab in his ongoing plan to shut down the CFPB and protect CEOs instead of consumers,” Farman said. “CFPB attorneys are afraid DOJ will dismiss these cases."

CFPB first issued reduction-in-force notices for approximately 1,500 personnel, roughly 88% of its workforce on April 17, while announcing 50% cuts to its inspection operations of financial services companies. Employees were told they would be locked out by 6 p.m. on April 18 and would be separated from federal service by June 16, barring qualifications for other available positions. 

A federal judge on April 18 paused the RIFs at CFPB, which led to the layoff notices being officially rescinded. An appeals court subsequently ruled that the RIFs could proceed, but delayed their implementation while a union sought an en banc hearing before the entire appellate panel.

For now, CFPB employees are working, with one enforcement workers saying they have a few active cases. 

“We’re working till we aren’t,” the employee said.  

Trump this week nominated Stuart Levenbach, an OMB official, to serve as CFPB director. Details of the transfer of work to Justice was first reported by Bloomberg Law.