By Sharon Fountain, Chicago and Gary Crusader Managing Editor
A Court Steps in to Save the CFPB
In a decisive ruling that could affect the financial rights of millions of Americans, a federal judge on Thursday, March 28, blocked the Trump administration’s attempt to effectively dismantle the Consumer Financial Protection Bureau (CFPB), the nation’s primary agency tasked with protecting consumers from predatory financial practices.
U.S. District Judge Amy Berman Jackson issued a preliminary injunction in the case, ordering the reinstatement of fired employees, the halt of any further reduction in staff, and the preservation of internal data and operations that allow the agency to perform its Congressionally mandated functions.
In her 112-page ruling, Judge Jackson wrote that “the defendants were fully engaged in a hurried effort to dismantle and disable the agency entirely,” and took actions “in complete disregard for the decision Congress made 15 years ago.”
The decision is a major legal victory for a coalition of plaintiffs, including the National Consumer Law Center (NCLC), the NAACP, the Virginia Poverty Law Center, the National Treasury Employees Union (NTEU), and the CFPB Employee Association. Represented by Public Citizen Litigation Group and Gupta Wessler LLP, the plaintiffs sued CFPB Acting Director Russell Vought and the agency itself earlier this year to stop what they described as an illegal and unconstitutional attempt to shut down the bureau.
What Is the CFPB and Why Does It Matter?
Created in the wake of the 2008 financial crisis, the CFPB was established by Congress to act as a consumer watchdog—monitoring financial institutions, credit reporting agencies, lenders, and debt collectors for abusive or deceptive practices. Over the years, the agency has recovered billions of dollars for American consumers through enforcement actions, lawsuits, and settlements.
For Black communities in Chicago, Gary, and across the nation—who have historically been disproportionately affected by discriminatory lending, high-cost credit, and fraudulent financial services—the CFPB has played a crucial role in leveling the economic playing field.
“The CFPB was designed to be a strong independent voice for consumers, especially those who have long been targeted by predatory lenders and financial institutions,” said Richard Dubois, executive director of the NCLC. “Today’s decision clears the way for the CFPB to get back to the work Congress created it to do.”
Trump-Era Attacks and Quiet Shutdown Attempts
The preliminary injunction comes just weeks after the Trump administration moved to gut the agency by quietly freezing its operations. Since February, the CFPB had dropped nine lawsuits, paused dozens of ongoing investigations, and issued stop-work orders for hundreds of employees.
The lawsuits that were dropped included actions against major players such as Capital One and Rocket Homes. At the same time, internal investigations into companies like Meta (parent of Facebook), CareCredit, Carvana, and Mr. Cooper were halted—jeopardizing potential relief for thousands, if not millions, of consumers.
According to a ProPublica investigation, the agency was investigating whether Meta improperly retained sensitive financial information entered by Facebook users through loan applications promoted on its platform. Other companies under investigation had histories of alleged abuses and had previously paid fines to the CFPB, including GreenSky and Afni Inc.
Some companies welcomed the agency’s retreat. A spokesperson for Capital One reportedly said they “strongly disputed” the claims against them, while Rocket Homes dismissed its lawsuit as an “empty claim.”
A Coordinated Political Effort to Eliminate Oversight
Plaintiffs in the case allege that President Trump and his administration made a deliberate effort to eliminate the CFPB in defiance of Congress. Trump had openly declared his intent to “totally eliminate” the agency, and Acting Director Vought followed through by initiating mass layoffs, terminating over 200 contracts, and limiting legal enforcement activities.
In fact, the administration even granted access to the CFPB to officials from the Department of Government Efficiency (DOGE), now headed by billionaire Elon Musk. Musk, who owns the platform X and has since announced a payments partnership with Visa, had posted “Delete the CFPB” and later “CFPB RIP” on his platform following Trump’s re-election. Critics say the move represented a glaring conflict of interest.
Mark Paoletta, the CFPB’s chief legal officer and a Trump appointee, reportedly required investigators to obtain personal approval before engaging in routine activities like contacting witnesses or reviewing subpoenaed documents. In one internal directive, Paoletta even threatened enforcement division employees with “insubordination” for working without prior permission.
Why Judge Jackson Stepped In
Judge Jackson’s opinion made clear that the administration’s actions were not simply a shift in priorities, but an unconstitutional effort to render the CFPB powerless.
She wrote that the administration’s approach amounted to a de facto elimination of the agency—gutting its staff, blocking its investigations, cutting off funding, and closing its offices—without the approval of Congress, which created and funds the bureau. In doing so, the administration ignored the separation of powers embedded in the Constitution.
Deepak Gupta of Gupta Wessler LLP, one of the attorneys for the plaintiffs, said, “Today’s victory blocks the unprecedented plan to dismantle the CFPB… This ruling upholds the Constitution’s separation of powers and preserves the Bureau’s vital work.”
How It Affects Consumers and Small Businesses
For everyday consumers and small business owners, the potential disappearance of the CFPB would have meant a loss of the only federal agency dedicated exclusively to their protection in the financial marketplace.
Without the bureau, financial institutions and fintech companies could have operated with far less oversight. Many of the cases paused or dismissed involved serious allegations of fraud, abuse, and unfair lending practices. In communities already plagued by predatory payday lending, racial redlining, and credit discrimination, losing the CFPB would leave many with nowhere to turn.
The decision also prevents further disruption to the CFPB’s enforcement of protections in areas such as mortgage servicing, auto lending, student loans, debt collection, and digital payments.
For example, one CFPB probe halted in the freeze involved CareCredit, a company that issues medical credit cards. Consumers frequently complained about being pressured into signing up for the cards while receiving treatment—without fully understanding the terms. The agency was investigating whether the company misrepresented promotional offers, leading to unexpected interest charges that left patients in deeper debt.
Another ongoing case involved Mr. Cooper, a major mortgage servicer, which had previously agreed to pay $73 million to consumers after the CFPB found it had illegally increased payments and foreclosed on homeowners in violation of agreements.
What’s Next?
While Judge Jackson’s ruling provides immediate relief and restores the CFPB’s operational capacity, the legal fight is far from over. The lawsuit against the administration will proceed, and the injunction is just one step in what may be a lengthy court battle.
Meanwhile, Acting Director Vought and Paoletta may continue efforts to limit the agency’s powers, albeit under judicial scrutiny. Advocates worry that further political interference could still hamper the CFPB’s work, especially if the administration appeals the injunction.
Public interest organizations say the ruling is a vital step toward protecting consumers and restoring accountability in the financial sector.
“Dismantling the CFPB would have devastating consequences for consumers across the country,” said Wendy Liu, an attorney with Public Citizen Litigation Group. “The Court’s order is a crucial step towards preserving the agency and blocking the Trump administration’s illegal attempt to shutter it.”
In Summary
For now, consumers have reason to breathe a little easier. The CFPB remains intact, its staff can return to work, and investigations into potentially abusive companies may resume. But the episode has served as a stark reminder of how quickly vital protections can be placed at risk—and how important it is for the courts, Congress, and the public to remain vigilant.
The Crusader’s Ongoing Commitment to Consumer Protection
Despite efforts by the Trump administration to dismantle the CFPB and silence its watchdog role, the Crusader Newspaper Group has remained committed to keeping readers informed about threats to consumer protections. For years, both the Chicago and Gary Crusader have published the syndicated consumer column by Charlene Crowell, a respected advocate and former Communications Director at the Center for Responsible Lending.
Through her weekly column, Crowell has chronicled the CFPB’s enforcement actions, legal challenges, and policy shifts—particularly those that affect Black and low-income communities. Her commentary continues to shine a light on issues such as student loan abuses, predatory lending, credit reporting errors, and mortgage discrimination.
In this moment of political uncertainty surrounding the CFPB, Crowell’s column serves as a vital public service—carrying forward the spirit of the bureau’s original mission by arming consumers with the information they need to protect their rights.