Two employees of the Consumer Financial Protection Bureau (CFPB) testified Tuesday that top officials’ plan to fire hundreds of workers remain intact, as a federal judge weighs whether to block the apparent dismantling of the agency.
The Trump administration initially planned to cut nearly 1,200 CFPB employees in early February before U.S. District Judge Amy Berman Jackson issued an order blocking officials from conducting mass layoffs.
One top CFPB official, Adam Martinez, the agency’s chief operating officer, suggested over two days of hearings that the CFPB had gone through chaos, but was now essentially functioning at the level required by law.
However, two witnesses on on Tuesday painted a much darker picture.
These witnesses said top CFPB officials are moving forward with efforts to completely shutter the agency through a large-scale workforce reduction plan.
Workers are also not being given a chance to apply for other positions in the government while reductions are done. Typically laid off employees can seek to be reassigned to “competitive areas” in the government that might offer them similar jobs.
“There would be no competition because there would be no jobs to compete for,” said. Alex Doe, a CFPB employee who was allowed to testify under a pseudonym.
Matthew Pfaff, chief of staff for CFPB’s Office of Consumer Response, said his office, which completes statutorily required work, handles roughly 350,000 consumer complaints per month.
That shifted dramatically when acting CFPB Director Russell Vought assumed leadership and instituted a stop-work order.
CFPB employees at that time “closed our laptop lids and walked away,” Pfaff said. When they returned, it was too a backlog that Pfaff said would take weeks, if not months, to work through.
“Chaotic is generous,” he said. “People have been out of work for three weeks. There was a lot of confusion about what was happening.”
Justice Department lawyer Liam Holland questioned Pfaff on cross-examination about his failure to flag to top officials that “urgent matters” within the office were left unattended. But Pfaff said that, given the agency-wide shut down, he understood “urgent” to reference matters exceeding the agency’s typical operations.
The evidentiary hearing took place in the context of a suit brought by the National Treasury Employees Union and other groups against the Trump administration. The groups requested a preliminary injunction that would stop further efforts to “unwind” the agency while litigation continues.
The administration has maintained that it does not plan to eliminate the consumer watchdog, emphasizing Trump’s decision to tap Jonathan McKernan to serve as CFPB director.
“I want to preserve an agency that could be revived, if necessary,” Jackson said, noting that “doesn’t mean it has to be the agency it was” but “it has to be something like it is now.”
Martinez on Monday took the stand to detail what he described as the “chaos” and “confusion” inside the agency when the Department of Government Efficiency (DOGE) arrived at the consumer watchdog last month. However, he signaled that DOGE’s initial “hard fist” has since softened as the agency’s new leadership has become more familiar with its work.
“I think there’s less confusion today,” said Martinez. “I have hope for the future.”
Completing his testimony Tuesday, Martinez said that DOGE’s appearance at the agency felt like a “hostile takeover.”
“I now realize how much damage can be done with just within a couple days,” he said.
Doe’s testimony at times contradicted Martinez’s.
While Martinez testified that a hearing the court held last month did not affect plans to execute mass firings, Doe said she notified Martinez of the hearing and, soon after, was directed to speed up work.
Once the court entered an agreement between the parties temporarily retaining the status quo, Doe said she told her superiors that they had to stop work. A senior advisor, she said, told her to press on because Martinez had not heard from Mark Paoletta, CFPB’s chief legal officer, about whether they really needed to stop.
“I said, ‘These cannot go out today, and I hope Mark Paoletta knows how to read a court order,’” Doe said.
Martinez, however, suggested DOGE’s “desire to unload staff from the agency” was already pressing and they “would have been equally as happy if we terminated people on Wednesday versus Friday.”
Doe also said she had been given no indication that plans to fully dismantle the agency had ceased, while Martinez signaled a much murkier future for the agency – though, he didn’t count out an outcome like the one suggested by Doe.
“I have absolutely no idea as to what the end result is for the bureau,” Martinez said.
