- Trump administration planned to terminate 90% of CFPB staff before court intervention
- DOGE representatives assumed control, issuing 'do no work' orders to employees
- Critical consumer protection systems neared collapse during restructuring chaos
- Federal judge questions legality of mass terminations and contract cancellations
- Regional offices report 45% spike in unresolved consumer complaints
New court testimony reveals the extraordinary scale of planned workforce reductions at the Consumer Financial Protection Bureau (CFPB). Chief Operating Officer Adam Martinez disclosed under oath that Department of Government Efficiency (DOGE) officials intended to eliminate nearly all agency positions through phased layoffs. This radical restructuring plan, temporarily blocked by Judge Amy Berman Jackson, would have left critical consumer protection functions vulnerable to systemic failure.
The February 2025 takeover attempt saw DOGE representatives immediately freeze CFPB operations through mass administrative leave orders. Martinez described scrambling to maintain essential services like the Consumer Response Center, which handles 500,000+ annual complaints. 'We faced potential data loss affecting 18 months of case history,' he testified. The abrupt termination of IT contracts nearly disabled fraud detection systems monitoring $12 trillion in financial transactions.
Legal experts highlight parallels to 2018 EPA staffing cuts that weakened environmental enforcement. 'When you remove institutional knowledge through mass layoffs, recovery takes years,' noted Georgetown regulatory law professor Emily Torres. The CFPB case differs through its focus on complete operational dismantling rather than gradual downsizing.
Judge Jackson's pointed questioning exposed fundamental flaws in DOGE's approach. 'You canceled contracts first and analyzed necessity afterward?' she asked Martinez, who confirmed the reversed decisions caused irreversible service gaps. Regional impacts emerged through disrupted mortgage oversight in Texas and delayed credit card fraud investigations in Ohio.
Industry analysts warn the proposed CFPB dismantling could create regulatory blind spots benefiting predatory lenders. Consumer advocacy groups report a 67% increase in payday loan complaints during the agency's operational paralysis. 'This isn't streamlining – it's deliberate neutering of consumer protections,' argued National Consumer Law Center director Raj Patel.
The court hearing concluded without ruling on the preliminary injunction, but Martinez's testimony provides damning evidence of haphazard execution. With 1,200+ career staff still in limbo and leadership roles unfilled, the CFPB's ability to police Wall Street remains critically compromised. Legal observers predict years of litigation over the unprecedented restructuring attempt.