Early Saturday, a federal judge ruled against Elon Musk’s Department of Government Efficiency, preventing it from accessing Treasury Department records containing sensitive personal information, including Social Security numbers and bank account details of millions of Americans.

Paul A. Engelmayer, the U.S. District Judge, issued the preliminary injunction in response to a lawsuit filed by 19 Democratic attorneys general against President Donald Trump. The lawsuit, brought before a federal court in New York City, claims that the Trump administration unlawfully granted Musk’s team access to the Treasury’s central payment system, violating federal law.

The payment system distributes trillions of dollars annually, covering tax refunds, Social Security benefits, veterans’ benefits, and more. It also holds a vast network of personal and financial data belonging to Americans.

Judge Engelmayer, who President Obama appointed, ruled that anyone restricted from accessing this sensitive information after January 20 must immediately delete all copies of any material obtained from the Treasury Department’s systems. He has scheduled a hearing on the matter for February 14.

Meanwhile, the White House has not yet responded to requests for comment regarding the lawsuit.

Elon Musk’s Department of Government Efficiency (DOGE) was established to identify and cut what the Trump administration considers unnecessary government expenditures. DOGE’s ability to access Treasury records and review various government agencies has sparked controversy. Critics argue that it grants Musk excessive influence over federal operations, while supporters praise it as a necessary step to control excessive government spending.

Musk has dismissed the backlash against DOGE on his social media platform, X, claiming that the initiative is helping taxpayers save millions of dollars.

Meanwhile, New York Attorney General Letitia James, whose office filed the lawsuit, has raised concerns that DOGE’s access to Treasury data could pose security risks and potentially lead to an unlawful freeze of federal funds.

In a video message from the office, James said, “This unelected group, led by the world’s richest man, is not authorised to have this information, and they explicitly sought this unauthorised access to illegally block payments that millions of Americans rely on, payments for health care, child care and other essential programs”. 

James, a Democrat and a prominent critic of Trump stated that the president does not have the authority to hand over Americans' private information to anyone at his discretion or to withhold federal payments that Congress has approved.

The lawsuit has been joined by multiple states, including Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, North Carolina, Oregon, Rhode Island, Vermont, and Wisconsin.

The legal challenge argues that granting DOGE access to Treasury records could disrupt funding already allocated by Congress, which would go beyond the Treasury Department’s legal authority. Additionally, the lawsuit claims that this access violates federal administrative laws and the constitutional principle of separation of powers. 

The lawsuit also claims that Treasury Secretary Scott Bessent altered the department’s long-established policy on safeguarding sensitive personal and financial data, enabling Musk’s DOGE team to gain access to its payment systems. “This decision failed to account for legal obligations to protect such data and ignored the privacy expectations of federal fund recipients,” including states, veterans, retirees, and taxpayers, the lawsuit describes.

Connecticut Attorney General William Tong stated that the purpose of DOGE’s activities within the Treasury system remains uncertain.

“This is the largest data breach in American history,” as per Tong’s statement on Friday. “DOGE is an unlawfully constituted band of renegade tech bros combing through confidential records, sensitive data and critical payment systems. What could go wrong?”

The Treasury Department has stated that the review is focused on evaluating the system’s integrity and that no modifications are being made. However, according to two individuals familiar with the matter, Musk’s team initially launched the inquiry to explore ways to halt payments from the U.S. Agency for International Development, which both Trump and Musk aim to dismantle. These individuals, fearing retaliation, spoke to The Associated Press on the condition of anonymity.

Meanwhile, Democratic lawmakers are pushing for a Treasury Department investigation into DOGE’s access to the payment system of the government.

Labour unions and advocacy groups have filed a lawsuit to halt the review of the payments system, questioning its legality. On Thursday, a judge in Washington issued a temporary order limiting access to the system, allowing only two employees to retain “read-only” privileges.