The CFPB is an independent government agency, designed and opened in 2011. It stood firm during the perilous days when the Trump administration tried to destroy it from within. The CFPB was created in the wake of the financial crisis of 2007. Its mission should be to detect and deter financial fraud. As a consumer watchdog, it crunched data, tracked emerging risks on the financial markets and fielded complaints from consumers. The agency had claimed credit for returning $21 billion to consumers through debt relief, reductions, or monetary compensation by December 2024.
Well, the last attempt under the last administration, led by DOGE, was to eliminate the CFPB entirely, mission accomplished. This change was one piece of a broader initiative to streamline and downsize the federal government. This so-called belt tightening involved massive staffing reductions in state agencies and the shuttering of entire state agencies and departments. The loss of the CFPB shutdown put people like Reverend Eva Steege on a razor’s edge. Reverend Steege had qualified for his own loan forgiveness and was owed $15,000 in overpayments. That brought her no relief—she still had an open case hanging over her head.
In an eleventh-hour surprise, US District Judge Amy Berman Jackson swooped in. On February 27, Judge Frey granted a preliminary injunction to stop the shutdown. The court issued the nationwide injunction after employees’ and advocates’ public pleas, as well as pressure from union representatives. They claimed that shutting down the agency would result in urgent and irreparable harm to consumers.
“That is an extraordinary step.” – Judge Amy Berman Jackson
The judge’s decision temporarily stopped the administration’s efforts to dismantle the CFPB. With this step, the protection of public interest consumers is safeguarded. It serves to remind of the watchdog’s important role in keeping governments financially accountable.
“If the defendants are not enjoined, they will eliminate the agency before the Court has the opportunity to decide whether the law permits them to do it.” – Judge Amy Berman Jackson
Judge Berman Jackson raised alarms over the motives of the then Trump administration and the need for immediate action.
“The Court cannot look away or the CFPB will be dissolved and dismantled completely in approximately thirty days, well before this lawsuit has come to its conclusion.” – Judge Amy Berman Jackson
This shutdown attempt, especially to those in the consumer protection and financial oversight realms, was seen as a direct attack. Through enforcement activities the CFPB had previously secured billions of dollars in debt relief and financial compensation for consumers. To even imagine its potential closure was to conjure the doom of long-held enemies of all consumer rights and protections.
Reverend Eva Steege’s case highlighted the personal impact of the agency’s potential shutdown. Her situation underscored the vital importance of the CFPB. They focused on the consumer’s specific monetary complaint and made whole the victims of bad acts.
“It was her hope to resolve the debt and spare her family that burden after she died.” – Judge Amy Berman Jackson
While all of these advancements were happening, many critics of the CFPB saw it as an overreaching, rogue entity that required reform.
“The CFPB has been a woke and weaponised agency against disfavoured industries and individuals for a long time. This must end.” – Russell Vought
The judge’s decision has temporarily stalled the Trump administration’s plans but has not resolved the underlying legal questions regarding the agency’s future. Though the case moves forward in court, it remains a landmark case for the future of federal oversight and consumer protection.
