NTEU Files Lawsuits to Block CFPB Shutdown & Safeguard Employee Privacy

Key Takeaways

• NTEU files lawsuits: The National Treasury Employees Union challenges the Trump administration's directive to halt CFPB operations, claiming violations of the separation of powers and employee privacy.
• CFPB work stoppage: NTEU argues that the order to suspend CFPB activities threatens the agency's ability to fulfill its consumer protection duties.
• Resignations at CFPB: Enforcement Director Eric Halperin and Supervision Director Lorelei Salas resign following the suspension of the agency's operations, citing inability to carry out their roles.
• Privacy concerns raised: NTEU’s second lawsuit addresses unauthorized disclosure of employee records to the Department of Government Efficiency (DOGE), alleging violations of the Privacy Act.
• Powell’s Senate testimony: Federal Reserve Chairman Jerome Powell stresses that no other agency has the same authority to enforce consumer protection laws in the financial sector.

Deep Dive

The National Treasury Employees Union (NTEU) has filed two lawsuits in response to recent executive actions that it argues threaten both the continued operation of the Consumer Financial Protection Bureau (CFPB) and the privacy of its employees. The lawsuits, filed on February 10, 2025, highlight concerns over the impact of these measures on both the agency's mission and the personal security of its workforce.

The first lawsuit targets an order from the Trump administration that directed CFPB employees to halt all work and stay away from the agency’s Washington, D.C. headquarters. NTEU argues that this sudden work stoppage is a violation of the separation of powers, asserting that Congress—not the executive branch—holds the authority to create, alter, or dismantle agencies like the CFPB.

"This isn’t just about keeping the lights on at the CFPB," says Doreen Greenwald, NTEU’s National President. "It’s about preserving the lawfully established authority of Congress to create agencies that protect consumers. The CFPB was created with a clear mission: to serve American people by safeguarding them from harmful financial practices."

The lawsuit, filed in U.S. District Court for the District of Columbia, names Russell Vought, the head of the Office of Management and Budget (OMB) and Acting Director of the CFPB, as the defendant. NTEU claims that the shutdown could be a precursor to dismantling the agency entirely, leaving millions of consumers without the protections they currently rely on. Since its creation in 2011, the CFPB has returned over $21 billion to consumers and resolved millions of complaints related to credit reporting, student loans, medical debt, and other critical financial issues.

Without the CFPB, enforcement of consumer protections would fall into the laps of other agencies—many of which lack the CFPB's specific mandate or the same level of authority. In testimony before the Senate Banking Committee, Federal Reserve Chairman Jerome Powell made it clear that no other agency is specifically tasked with enforcing consumer protection laws in the banking sector. This underscores just how important the CFPB is in protecting vulnerable consumers, especially in areas like lending, credit cards, and mortgages.

But the legal challenges don't stop with the work stoppage. NTEU’s second lawsuit targets the CFPB’s disclosure of employee records to the Department of Government Efficiency (DOGE). The union alleges that sensitive personal data, including health records and insurance coverage, was shared without employee consent, violating the Privacy Act. NTEU fears that this unauthorized disclosure could lead to retaliation, intimidation, and harassment, particularly given DOGE's adversarial stance toward federal employees.

"The harm caused by improper disclosure of personal information cannot be undone," Greenwald emphasizes. "These employees are public servants dedicated to protecting consumers, and they deserve to have their privacy respected, especially when the information at stake is so sensitive."

The tension within the CFPB has escalated in recent months, particularly after the resignation of two top officials—Enforcement Director Eric Halperin and Supervision Director Lorelei Salas—following the administration's directive to suspend agency activities. Halperin explained that the work stoppage had made it impossible for him to effectively carry out his role in protecting consumers, which led to his resignation. Salas, meanwhile, called the directive illegal and followed suit by resigning.

However, the White House Office of Management and Budget (OMB) disputed the notion of resignation, claiming both Halperin and Salas had been placed on administrative leave for alleged insubordination. The OMB emphasized Halperin’s refusal to comply with the directive regarding ongoing court cases. Additionally, Deputy Director Zixta Martinez was also placed on leave, though the reasons behind her absence remain unclear.

On February 10th, the union held a rally at the CFPB headquarters, calling on supporters to join the fight to protect the agency. In a tweet that accompanied the rally, NTEU made its stance clear, urging the public to stand against the dismantling of the CFPB and criticizing the administration’s actions.

As the lawsuits make their way through the legal system, the future of the CFPB hangs in the balance. Will the agency remain a strong protector of consumers, or will these legal challenges lead to its diminishment? The outcome is uncertain, but for now, NTEU is committed to defending both the employees who work at the CFPB and the consumers who rely on it.

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