Preliminary Injunction Orders Trump Administration to Reinstate CFPB Student Loan Ombudsman and Get CFPB Back to Work on Behalf of Consumers
March 28, 2025 | WASHINGTON, D.C. — Today, federal judge Amy Berman Jackson issued a preliminary injunction, formally blocking the Trump Administration from dismantling the Consumer Financial Protection Bureau (CFPB) while the parties continue to litigate the agency’s future. The lawsuit, filed last month by the union representing CFPB employees who had been terminated, national and state consumer protection organizations, and individual consumers, challenges the administration’s efforts to shutter the congressionally created agency.
In a 112-page memorandum opinion, Judge Jackson found that the plaintiffs had successfully met the high burden for this sort of extraordinary relief, namely that they are likely to succeed on their claims, that they would suffer irreparable harm without this injunction, and that the injunction is in the public interest. In her order implementing the decision, Judge Jackson specifically requires the reinstatement of the Student Loan Ombudsman, Julia Barnard.
Judge Jackson stressed that “the Court can and must act” to preserve the CFPB at this early stage in the litigation because, she determined, “if the [Trump Administration] defendants are not enjoined, they will eliminate the agency before the Court has the opportunity to decide whether the law permits them to do it, and as the defendants’ own witness warned, the harm will be irreparable.”
In response, Julia Barnard, former CFPB Student Loan Ombudsman, released the following statement:
“Student loan borrowers need to have someone in their corner. I’m looking forward to my team getting back to this important work. Congress created the CFPB in recognition of the vulnerable position that millions of students are in when trying to finance their higher education. Judge Jackson’s decision highlights the harms that these students and borrowers face without a watchdog and advocate in their corner.
“The CFPB student loan ombudsman role was designed to help borrowers like Pastor Eva Steege, who was in the process of getting assistance with her Public Service Loan Forgiveness when the stop work order was issued; while being forced to wait for help from the CFPB, she tragically passed away. It’s borrowers like her and the thousands more who will benefit from a CFPB that is back to work.”
In response, SBPC Executive Director and former CFPB official Mike Pierce, released the following statement:
“Today’s order is a sweeping rebuke for the Trump Administration’s plainly illegal actions to try and dismantle the CFPB. The CFPB was created by Congress to protect Americans from financial fraud and crimes—and keep powerful financial interests in check. This is a win for all of us. It shows that when we join together and fight back, we can protect each other from the unprecedented and illegal efforts to dismantle the public institutions that protect us. For now, it is clear that Donald Trump, Elon Musk, and Russell Vought have not been able to ‘delete CFPB.’”
Background
Created in the aftermath of the 2008 financial crisis, Congress gave the CFPB explicit directives to establish offices and programming dedicated to protecting vulnerable consumers, issue regulations to govern particular industries, and ensure transparent access to information about consumer financial products. Since opening its doors, the CFPB has directly obtained over $21 billion in relief for over 205 million people from companies that illegally cheated consumers.
Acting CFPB Director Russell Vought fired CFPB Student Loan Ombudsman Julia Barnard—a CFPB position required by law under Section 1035 of the Dodd-Frank Wall Street Reform and Consumer Protection Act—as part of a concerted and unlawful attempt to dismantle the agency.
Under Trump and Vought’s leadership, the CFPB has been systematically gutted, with mass firings, halted investigations, and a refusal to comply with nearly 90 congressional mandates designed to protect consumers.
On February 13, the union representing CFPB employees who had been terminated, national and state consumer protection organizations, and individual consumers, filed a lawsuit challenging the administration’s efforts to shutter the created agency.
Further Reading
SBPC press release: Trump, Vought, and Musk Team Up to Abandon Students and Borrowers, Illegally Fire Top Student Loan Industry Watchdog
Maryland lawsuit filed to prevent Trump Administration from defunding the CFPB: Mayor and City Council of Baltimore, Economic Action Maryland Fund v. Vought (1:25-cv-00458)
National Treasury Employees Union et al. lawsuit against Trump for illegally shutting down CFPB: Lawsuit Challenges Trump Administration’s Illegal Effort to Shut Down CFPB
SBPC and Consumer Federation of America (CFA) memo identifying 87 congressionally imposed mandates Director Vought is refusing to perform: Advocates Applaud Lawsuits Challenging Trump and Vought’s Corrupt and Unlawful Attempt to “Delete” Consumer Watchdog Agency, CFPB
SBPC memo on Twitter/X payments: Twitter/X Payments: Public Corruption Poses Risks for Consumers and Competition
SBPC blog on Musk and DOGE illegal attempt to “delete” CFPB: Elon and DOGE Are Attempting To Illegally “Delete” the CFPB, Here Is Why This Matters To Student Loan Borrower
SBPC press release on CFPB Director Chopra’s firing: CFPB Director Chopra’s Firing Tops Oligarchs’ Wishlist, Foreshadows Swing in Consumer Agency Priorities to Benefit Big Banks and Billionaires
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.