The Consumer Financial Protection Bureau (CFPB) has begun sending out mass layoff notices to its employees, despite a court order intended to block such actions. According to a notice reviewed by The Verge, Acting Director Russell Vought informed affected employees that they would be subject to a reduction in force (RIF) action, citing the need to "restructure the Bureau's operation to better reflect the agency's priorities and mission."

The move appears to be in defiance of a federal judge's order in March, which prohibited the Trump administration from terminating any CFPB employee without cause related to individual performance or conduct. Although an appeals court partially stayed that portion of the injunction earlier this month, it only allowed for layoffs deemed "unnecessary to the performance of defendants' statutory duties" after a "particularized assessment." It is unclear whether such an assessment was conducted in this case.

According to Fox Business, around 1,500 workers will receive RIF notices across core functions, citing an unnamed source. The layoffs come as the CFPB shifts its priorities, with Chief Legal Officer Mark Paoletta announcing on Thursday that the agency would "shift resources away from enforcement and supervision that can be done by the States" and rescind previous enforcement and supervision priority documents.

The development has significant implications for the CFPB's operations and the broader regulatory landscape. The agency was established in the wake of the 2008 financial crisis to protect consumers from unfair financial practices. Its enforcement and supervision activities have been instrumental in holding financial institutions accountable for their actions. The layoffs and shift in priorities may signal a significant weakening of the agency's ability to fulfill its mission.

The move also raises questions about the Trump administration's commitment to consumer protection and its approach to regulatory reform. The administration has been vocal about its desire to roll back regulations and reduce the size of government agencies. The CFPB has been a particular target, with the administration seeking to curtail its powers and autonomy.

As the situation unfolds, it remains to be seen how the affected employees will be impacted and what the long-term consequences will be for the CFPB's ability to protect consumers. The development is likely to spark intense debate and scrutiny from lawmakers, consumer advocates, and the financial industry.