CFPB funding and operation
National Treasury Employees Union v. Russell Vought
Date: April 28, 2025.
Issue: Whether CFPB violated the preliminary injunction preventing the Bureau from defunding itself by firing 1,483 employees.
Case Summary: In a 2-1 decision, a D.C. Circuit panel modified its partial stay of district court Judge Amy Berman Jackson’s preliminary injunction by removing CFPB’s ability to engage in any reduction in force (RIF).
On Feb. 13, 2025, NTEU and its co-plaintiffs (collectively NTEU) sued CFPB, alleging President Trump and Acting Director Vought violated the Constitution and the APA, by suspending CFPB’s legally mandated activities and effectively shutting it down. NTEU also sought a preliminary injunction. On March 28, 2025, Judge Jackson granted NTEU’s motion for a preliminary injunction, emphasizing the court could not stand by while CFPB risked dissolution before the case concluded. The court held that the preliminary injunction preserves CFPB’s contracts, workforce, data, and operations, and protects employees’ ability to perform their duties until the litigation ends.
On April 11, 2025, a D.C. Circuit panel partially stayed the injunction and allowed CFPB to fire employees it had classified as unnecessary after conducting “individualized” or “particularized” assessments. CFPB then implemented a RIF and fired most of its workforce. In response, NTEU filed a motion for an order requiring CFPB to explain why it had not violated the preliminary injunction. Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia blocked the mass termination of 1,483 employees. She suspended the RIF and ruled that CFPB could not implement, continue, or complete the firings until the court resolved NTEU’s motion. Judge Jackson also ordered an evidentiary hearing to determine whether CFPB was complying with or defying the court’s order.
The panel ruled that CFPB must halt mass firings for now, reversing its earlier decision that had permitted the Bureau to proceed with terminations. The panel noted that the parties strongly disagree over whether the requirement for “individualized” and “particularized” assessments allows for judicial review. In light of this dispute, the panel reinstated the full preliminary injunction to ensure NTEU can obtain meaningful relief if CFPB loses on appeal. The court emphasized that it had already accommodated CFPB’s interests by expediting the appeal process. It will consider both parties’ arguments during oral argument. As a result, the preliminary injunction remains in effect until the court issues further orders.
In dissent, Judge Neomi Rao stated that she would have continued the stay during the appeal. She argued that the district court’s preliminary injunction posed serious separation of powers issues by inviting ongoing judicial oversight of an Executive Branch agency. Judge Rao also criticized Judge Jackson’s modification of the injunction, calling it inconsistent with the April 11 stay and an abuse of discretion.
Bottom Line: Following the evidentiary hearing, the court will determine whether CFPB violated the preliminary injunction. In the meantime, CFPB is barred from carrying out its RIF.
Documents: Order
