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CFPB Issues Layoff Notices Amid Legal Controversies

The Consumer Financial Protection Bureau (CFPB) is reportedly issuing mass layoff notifications that seemingly challenge a court ruling that prohibits additional layoffs following reductions linked to the agency’s recent organizational shifts influenced by cryptocurrency movements.

In a communication reviewed by The Verge, CFPB Acting Director Russell Vought informed an employee, “I regret to inform you that you are affected by a reduction in force (RIF) action. This RIF action is necessary to restructure the Bureau’s operation to better reflect the agency’s priorities and mission.” The message indicated that employee access to CFPB systems would be terminated after Friday, and those affected would be placed on administrative leave until their termination date.

According to Fox Business, an estimated 1,500 employees across key departments are expected to receive RIF notices, as per an unnamed source. On the evening prior, CFPB Chief Legal Officer Mark Paoletta communicated the agency’s revised enforcement priorities, stating that the CFPB would “shift resources away from enforcement and supervision that can be done by the States,” and revoked earlier directives regarding enforcement and supervision priorities, as reported by The Wall Street Journal.

Earlier in March, a federal judge issued an order preventing the Trump administration from terminating any CFPB employee, unless justified by the individual’s performance or conduct, and barred the issuance of any reduction-in-force notices. This ruling was aimed at protecting the employees of the bureau during a transitional phase. A recent appeals court ruling partially modified this order, allowing the CFPB to issue layoff notices only if deemed necessary to fulfill the agency’s statutory obligations following a detailed assessment.

Source
www.theverge.com