Reinstated and It Feels So Good

Score a win for the federal court system over President Trump, the Department of Government Efficiency, and its head, billionaire GOP donor Elon Musk.  On the evening of March 13, U.S. District Judge James Bedar in Maryland ordered the Consumer Financial Protection Bureau to reinstate its illegally fired probationary employees in a lawsuit that Democratic attorneys general in Washington, D.C., and 19 states general had filed against the Trump administration. Further, the court found that the CFPB firings were illegal reduction in force (RIF) actions. The court also ordered that CFBP management must, for future RIFs, obey instead of ignore, as it had done, a statute that requires the agency to obey the union contract that compels it to receive 90 days’ notice.

Chris Fasano is an enforcement attorney with the CFPB. “I was only at the CFPB for about three months before I was fired,” he said. “Before that, I was a legal aid attorney for a dozen years, representing low-income homeowners facing foreclosure.

“I knew that the CFPB firings were illegal,” according to Fasano. “I was less sure about the relief.”

Public service is not a road to riches. “I took a job at the CFPB because I wanted to make a bigger impact and bring justice to a wider swath of the public,” he said. “I have been investigating companies violating the Consumer Financial Protection Act (of 2010), which bans unfair, deceptive, and abusive practices for consumer goods and services. There are a host of other statutes that we enforce for credit cards, mortgage lending, and servicing.”

Companies, for example, in the payday lending industry, attract attention from the CFPB. Prior to his firing, Fasano was leading two cases in the investigation phase, making civil investigative demands of financial companies to ensure they were following the law. If they weren’t, according to Fasano, the CFPB can and does take measures to enforce lawful business practices.

“This would include,” Fasano said, “for example, investigating credit card companies for charging consumers junk fees. If we found that companies violated the law, we would sue them and get restitution, meaning that the wrongdoing company would have to compensate consumers for the financial harms inflicted.”

Lindsey Siegel is a senior litigation counsel in the enforcement division of the CFPB. Like Fasano, she was on probation when the Trump administration fired her. The probationary period is two years for CFPB attorneys like Fasano and Siegel, members of Local Chapter 335 of the National Treasury Employees Union.

Russel Vought is acting CFPB director and main architect of the Heritage Foundation’s Project 2025, the playbook for Trump’s attack on federal employment and social spending. Vought ordered the firings of about 200 CFPB employees, more than 10 percent of the CFBP labor force, according to the union.

Siegel had been involved with litigating and settling with companies that are shortchanging consumers. One such firm is a loan servicer for Atlanta-based US Auto Sales. The loan servicer had been charging consumers, especially those with low incomes, add-on (hidden) fees to pad their profits, according to Siegel. (One of four U.S. households live paycheck to paycheck, according to Bank of America data, https://institute.bankofamerica.com/economic-insights/paycheck-to-paycheck-lower-income-households.html)

Another unlawful violation was the loan servicer installing starter interruption devices on the vehicles that consumers purchased. These devices were designed to shut off the car engine when a borrower was behind on loan payments, according to Siegel.

“These starter interaction devices on people’s cars did a couple of things,” she said. “They emitted these loud tones when people were allegedly behind on their loans. We had even one consumer who submitted a declaration with the court saying that she was on the highway driving with her kids when one of these starter interaction devices shut her car engine off. And it was terrifying. Luckily, she was able to pull over to the side of the road and wasn’t injured, but it was a terrifying experience for her. She wasn’t even behind on her loan at the time, a comment that many other consumers made to us.

“We also had some consumers tell us their cars were illegally repossessed, and we put it into a complaint in federal court. A judge ordered that this loan servicer pay the plaintiffs $42 million in redress and penalties. Redress is like money back to consumers, and then there was a $10 million civil penalty that the company was ordered to pay. One of the things that was happening right before I was fired is that my team and I were working on getting this money out to consumers, tens of thousands of whom had experienced various harms.

“We were in the process of doing that. So, there’s money that consumers are owed that’s not going out to them because the CFPB hasn’t been able to do its work.”

The Trump administration has appealed the court decision that reinstated Fasano, Siegel and thousands of other fired probationary employees at the CFPB and the departments of Agriculture, Commerce, Education, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Labor, Transportation, Treasury and Veterans Affairs, along with the Consumer Financial Protection Bureau, Environmental Protection Agency, Federal Deposit Insurance Corporation, General Services Administration, Small Business Administration, and U.S. Agency for International Development.

Meanwhile, Fasano and Siegel are reinstated but on administrative leave at the CFPB. https://www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/administrative-leave/  “I have not been authorized to do any work,” Siegel said, “and I don’t have any work equipment anymore. I was ordered to mail it back the week before.”

Fasano also lacks workplace equipment. “I shipped my laptop and iPhone back to the CFPB a few days before the court reinstated us,” he said.

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