The email notified employees to prepare for "workforce optimization," or layoffs, because Congress passed the president's massive tax and spending bill that capped the amount of funding that the CFPB can receive from the Federal Reserve System's operating budget at 6.5% — down from 12% previously. 

"The CFPB must continue to evaluate workforce optimization opportunities to align with congressionally-mandated funding levels since the bureau's transfer cap from the Federal Reserve was revised from 12% to 6.5% per year," according to the email obtained by American Banker. "This evaluation includes considering a possible reduction in force action."

The National Treasury Employees Union, which sued the CFPB in February to halt mass firings, said the crisis over the CFPB's funding was created by acting CFPB Director Russ Vought. 

"This is a manufactured crisis by Russ Vought who failed in his duties as acting Director by refusing to request the funds necessary for the CFPB to fulfill its statutory obligations," said  Jasmine Hardy, chapter vice president of CFPB Union, NTEU 335, in an email. "Everyday Americans defrauded and scammed by big banks and corporate bad actors will suffer as a result."

It is unclear how many employees could be fired, or which ones would be retained. 

The CFPB is funded from the operating budget of the Federal Reserve System rather than through congressional appropriations. The bureau's budget in fiscal 2025 is capped at an estimated $446 million, a 43% drop from a cap of $785.4 million in fiscal 2024. The bulk of the bureau's funding pays for employee salaries. 

Vought requested zero funding for the bureau's fiscal third quarter, citing a large existing balance. CFPB employees, who declined to be named for this story out of fear of retaliation, say the email has heightened fears the agency could run out of money soon.

The pending mass firings come amid a contentious legal battle between CFPB leadership and the NTEU, which represents the CFPB's unionized employees. Last month, a federal appeals court ruled against the union, allowing Vought to fire up to 90% of the bureau's staff. That ruling is on hold pending an appeal by the union. The union has 45 days to file a request for an en banc hearing before the full court. The injunction halting mass firings remains in effect until after a ruling. 

The CFPB said in the first paragraph of its email to employees: "On Friday August 15th, the United Stated [sic] Court of Appeals for the District of Columbia vacated a preliminary injunction on CFPB efforts to restructure the organization. The bureau will not restructure until the plaintiffs have had a chance to ask the full D.C. Circuit to review the case and the mandate vacating the injunction formally issues." 

The email under the heading "Please update your personal data and resume on file," was not signed by Vought or any individual but rather by the agency's Office of Human Capital. 

"As the CFPB evaluates options, the Office of Human Capital (OHC) advises that you proactively review your personal records for accuracy," according to the email. Employees are advised to update a copy of their resume by Sept. 25, "to ensure that employees' retention rights are followed in the case of a RIF."

The email states that CFPB officials need employees' resumes because if a resume is not available, the agency "may be unable to credit all your experience for qualification purposes." However, nonfederal employment does not count under a RIF.

In a reduction in force, retention rights refer to guarantees that employees with time in federal service will be retained over more junior colleagues, which would allow some staff to potentially return to a previous position if their jobs are eliminated. 

The CFPB's management is asking for updated resumes to build a register of employees who will be ranked based on tenure, military preference, total years in federal service and performance, according to CFPB employees.

Since the CFPB was created as part of the Dodd-Frank Act of 2010, Republicans have sought to cut the agency's funding and reduce its broad reach. Vought has stopped nearly all supervision and enforcement of large banks with over $10 billion in assets, and has eliminated oversight of nonbanks in his effort to gut the agency. 

The median salary of CFPB employees is roughly $121,000, versus the average federal employee salary of roughly $106,000. That higher average compensation is largely attributable to the large number of attorneys at the agency, who generally command higher pay. 

In addition, Vought has been billing the CFPB $4.7 million a year for a personal security detail due to alleged threats against him, which was first reported in July by Government Executive. Though Vought has a primary job as the director of the Office of Management and Budget, the CFPB is reportedly footing the bill for his security detail through an interagency agreement. No previous director required a security detail.