Email shows Trump officials are lying to federal court, directing CFPB staff to ignore law

(Photo by SAUL LOEB/AFP via Getty Images)

An email sent Monday by a Trump administration official, obtained by Popular Information, explicitly instructs federal employees at the Consumer Financial Protection Bureau (CFPB) to not carry out activities mandated by law. The email directly contradicts representations CFPB officials made in federal court.

CFPB Principal Deputy Assistant Director Cassandra Huggins sent an email at 12:13 PM Eastern telling members of the CFPB supervision staff that she has been advised by agency leaders that they are not authorized to resume "supervision/examination activity, even though the Bureau is required by law to carry out these activities." It is a striking admission that the agency intends to operate outside the bounds of the law.

Huggins' email is related to a legal battle between the Trump administration and CFPB employees that started in earnest on February 7, when President Trump named Office of Management and Budget Director Russell Vought as the acting head of the CFPB.

The purpose of the CFPB is to ensure that mortgages, credit cards, and other consumer financial products are fair and transparent. Vought, however, was one of the principal authors of Project 2025, a right-wing blueprint for Trump's second term, which called for abolishing the CFPB.

After his appointment, Vought immediately began shutting down the CFPB's work. On February 8, Vought sent an email to CFPB staff directing them to stop most of their work "unless expressly approved by the Acting Director or required by law." A follow-up email on February 10 from Vought was even more severe. Vought informed CFPB staff that the office was closed and "employees should stand down from performing any work task."

On February 14, Vought placed nearly all CFPB employees on indefinite administrative leave.

This course of action has created some legal trouble for Vought and the Trump administration. Although the Trump administration is ideologically opposed to the mission of the CFPB, many of its functions are required by law. Vought cannot shut down the CFPB with a few emails. It requires an act of Congress.

A labor union representing CFPB employees sued Vought in his capacity as acting director of the CFPB, alleging that Vought's efforts "to bring the CFPB’s statutorily prescribed work to a halt violate separation of powers principles."

In response, the CFPB has claimed that they were not shutting down the agency or preventing staff from doing statutorily required work. A February 24 affidavit submitted by CFPB Chief Operating Officer Adam Martinez said Vought's February 8 email was "sent in order to allow the new Acting Director and political leadership to assess the CFPB’s current operations and evaluate the CFPB’s priorities in light of the new Administration" and asserted it was "not unusual for these types of steps to be taken at an agency at the beginning of a new administration." Martinez described the February 10 email from Vought, which instructed all staff to "stand down from performing any work task," as "instructions regarding work tasks." One section of Martinez's declaration was titled, "The CFPB is Committed to Performing Statutory Obligations."

On March 2, Martinez submitted a supplemental affidavit acknowledging that, during the week of February 10, he told employees that a "closure of the agency" was impending and the CFPB was now in "wind down mode." Martinez said he believed that to be true at the time, but things had changed. He again insisted the agency continued "to perform each of the CFPB’s critical statutory responsibilities."

In an apparent effort to square his representations to the court with his communications to CFPB staff, Martinez sent an email to CFPB staff on March 2 with a message from CFPB Chief Legal Officer Mark Paoletta. In the email, which was also obtained by Popular Information, Paoletta claims that Vought's emails were intended to "ensure that new leadership could establish operational control over the agency while ensuring it would continue to fulfill its statutory duties." Some employees, Paoletta suggests, misinterpreted Vought's emails and "have not been performing statutorily required work." But Paoletta says that "[e]mployees should be doing work required by law and do not seek prior permission to do so."

One of the aspects of CFPB's work that is "required by law" is conducting periodic examinations of large financial institutions to determine compliance with consumer financial laws and assessing the risks various financial products pose to consumers. The CFPB staff who performs this legally required work is known as the supervision staff.

Martinez's email created some confusion among supervision staff. They are all on administrative leave and Vought's February 8 email specifically instructed them to "[c]ease all supervision and examination activity." That was hard to misinterpret. Now they were supposed to resume their work?

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Huggins' March 3 email was sent to the supervision staff. She said she knew there was "quite a bit of confusion surrounding the message we received from Adam Martinez/Mark Paoletta on March 2." Huggins told the supervision staff that she "requested and received clarification that their message was not intended to authorize the reinstatement of supervision/examination activity, even though the Bureau is required by law to carry out these activities." (Emphasis in original.) Huggins says she has been told "Supervision staff should continue to operate on administrative leave as directed by the Acting Director unless you have received express permission to work on a task."

In a February 27 filing, the plaintiffs in the lawsuit questioned the "veracity" of Martinez's declarations to the court. Huggins' March 3 email further undermines Martinez's credibility.

Judge Amy Berman Jackson, who is overseeing the case, appears to be taking the concerns about Martinez's truthfulness seriously. On Monday, Jackson ordered Martinez to appear in court on March 10 for an evidentiary hearing that gives the plaintiffs an opportunity "to dispute Martinez's assertions."