The federal judge halted the layoffs due to concerns that the Trump administration was not complying with a prior court injunction that maintains the CFPB's existence until the merits of a lawsuit are decided. The judge expressed deep concern over the scope and speed of the layoffs and ordered a pause for further legal review and a scheduled hearing for testimony.

The Trump administration planned to lay off roughly 1,500 employees at the CFPB, which would leave only about 200 employees remaining, representing nearly 90% of the workforce being cut.

Judge Amy Berman Jackson required the Trump administration to submit internal documents related to the layoffs and scheduled a hearing on April 28 to hear testimony from officials involved in the reduction in force procedures.

The Trump administration, supported by conservatives and businesses, aimed to cut down the CFPB due to perceptions of fraud, waste, abuse, and politicization. The administration intended to reduce the CFPB's supervisory activities and focus more on depository institutions, reflecting a shift away from the prior focus on non-banks.

Critics argue that the mass layoffs of CFPB staff would be detrimental to consumer protection efforts, emphasizing that the CFPB plays a foundational role in safeguarding consumers from financial abuses and enforcing regulatory protections.