Union challenging CFPB workforce reduction rationale
The Consumer Financial Protection Bureau (CFPB) is facing a legal challenge from its workers' union over its recent decision to lay off a significant portion of its staff. The union argues that the CFPB has disregarded a court order requiring an individualised assessment before any layoffs.
In a filing with the U.S. Court of Appeals for the D.C. Circuit, the National Treasury Employees Union (NTEU) expressed concerns about the CFPB's plan to cut off nearly 1,500 employees' access to bureau systems. The union's concern stems from the CFPB's alleged failure to conduct the individualised assessment as required by a court order.
Earlier this month, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia temporarily paused the CFPB's plan to cut off nearly 1,500 employees' access to bureau systems. The court order required the CFPB to conduct an individualised assessment before any layoffs could be implemented.
However, the NTEU attorneys argue that the CFPB has not complied with this order. They claim that the CFPB has not consulted any programmatic managers before implementing the reduction in force and that the layoffs would violate the data-deletion and consumer response provisions of the court order.
The CFPB's decision to drop a lawsuit against Reliant Holdings (doing business as Horizon Card Services) and its CEO Robert Kane is irreversible, as it was done with prejudice, meaning the lawsuit cannot be refiled in the future. The NTEU attorneys also expressed doubts about the CFPB's Chief Legal Officer Mark Paoletta's declaration that the bureau conducted the assessment, stating that it lacks details such as dates, when the particularised assessment was done, the names of the people involved, and how or when the RIF orders came to be justified on April 16 or April 17.
The RIF notices issued by the CFPB affected employees overseeing the consumer call center, those responsible for directing complaints to companies, staff responsible for maintaining the consumer complaint database, the supervisor of the escalated case management team, and several members of the team. The CFPB was ordered to ensure its Office of Consumer Response maintains a single, toll-free telephone number, a website, and a database collecting consumer complaints, and that complaints be monitored and responded to. However, 112 of the 128 employees that work in consumer response received RIF notices.
The NTEU attorneys argue that the cuts the CFPB sought to implement last week would violate the data-deletion and consumer response provisions of the court order. They also point out that the injunction granted by Berman Jackson requires the CFPB to continue the work of the escalated case management team, but they were included in the RIF.
The CFPB's chief of staff of the consumer response office stated that the office would have been "incapable of performing its statutory obligations shortly after CFPB employees los[t] access to systems on April 18 at 6 PM." The NTEU argues that CFPB leadership has taken another shot at doing what the district court had stopped them from doing only a few weeks ago: shuttering the CFPB.
The district court hearing regarding the CFPB's layoffs is scheduled for Monday. The NTEU is urging the appeals court to deny the CFPB's bid to override the district judge's decision to halt the bureau's 1,500 layoffs. The union's filing counters a motion the CFPB filed on Friday. The CFPB's direction to ignore concerns about the court order to conduct the assessment came from Mark Paoletta, the CFPB's Chief Legal Officer. When CFPB employees raised concerns with CFPB leaders about the court order to conduct the assessment, they were told that all that mattered was the numbers.
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