Full DC Circuit Will Review Trump’s Bid to Dismantle CFPB (2)

The Trump administration can’t move forward with plans to fire most employees at the Consumer Financial Protection Bureau after a full federal appeals court in Washington agreed to review a prior panel’s decision that cleared the way for mass layoffs.

In a per curiam order Wednesday, the US Court of Appeals for the District of Columbia Circuit vacated the Aug. 15 decision from a split three-judge panel that had allowed acting CFPB Director Russell Vought to fire up to 90% of the agency’s workforce. The court set oral arguments in the case for Feb. 24 and reinstated a stay blocking the firings while it reconsiders the panel opinion.

In the now-vacated panel decision, Judges Gregory Katsas and Neomi Rao held that a lower court lacked jurisdiction to consider claims based on loss of employment that the National Treasury Employees Union and co-plaintiffs brought against the administration, and that the plaintiffs failed to target a final agency action under the Administrative Procedure Act.

Judge Cornelia T.L. Pillard dissented, arguing that the lower court’s injunction on firings maintained the status quo and prevented the CFPB from being destroyed while the legality of plans to dismantle it is still being adjudicated. The union and co-plaintiffs sought en banc review by the full DC Circuit in September, arguing that the split decision departed from precedent and would render courts unable to enforce the separation of powers going forward.

The full court’s Wednesday order drew praise from the plaintiffs and their allies.

“The Consumer Financial Protection Bureau is crucial to protecting American consumers and the economy,” Jennifer Bennett, an attorney at Gupta Wessler LLP representing the plaintiffs, said in a statement. “We will continue to fight to prevent Russell Vought and the Trump administration from shutting it down.”

“Today’s ruling is a necessary and timely win for CFPB workers and the everyday Americans we serve,” CFPB Union President Cat Farman said.

Advocacy groups including the Consumer Federation of America filed amicus briefs in support of the union’s case, as did lawmakers including Senate Minority Leader Chuck Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), and Rep. Maxine Waters (D-Calif.). Shuttering the CFPB would be an unconstitutional usurpation of legislative power, dismantling an agency Congress created to protect consumers, the amici said.

Warren, the CFPB’s architect, called the DC Circuit’s move “good news.”

“That means Russ Vought still can’t carry out his lawless plan to ‘close down’ the agency that has returned more than $21 billion directly to Americans scammed by big banks and giant corporations,” she said in a statement. “The courts must follow the law, or families across the country will pay the price.”

The CFPB and the Justice Department didn’t immediately respond to requests for comment.

Funding Dispute

Even with the August panel decision put on hold, the Trump administration has taken steps to zero out the CFPB’s funding.

The Justice Department’s Office of Legal Counsel issued an opinion in November stating that the CFPB couldn’t get any additional money from the Federal Reserve because the central bank wasn’t profitable. The CFPB gets its funding through the Fed rather than the congressional appropriations process.

But that argument has faced stiff pushback at the district court level, from the NTEU as well as former Fed officials. They argue that Congress didn’t intend for the CFPB’s operations to hinge on whether the Fed earns more than it pays out to banks on securities it issues.

The new question over the CFPB’s funding is now pending before the US District Court for the District of Columbia. The Trump administration on Tuesday told Judge Amy Berman Jackson that it had asked the Fed for its opinion on whether it can provide additional funding to the CFPB based on reports that the central bank is once again generating profits.

Vought had said in court filings that the CFPB was set to run out of money by early 2026 due to the renewed questions over its funding. He also said in an October podcast appearance that he expected to shut down the CFPB in that time frame.

Meanwhile, the CFPB announced last month that it’s transferring all active litigation, including enforcement actions and regulatory challenges, to the Justice Department. It has also said it plans to issue interim final rules for open banking and other pending regulations given questions over the agency’s funding.

Vought has yet to ask the Fed for additional funds, while reporting that the agency needs around $280 million to function in fiscal 2026. Congress cut the amount of money the CFPB can request from the Fed by around half in the tax-and spending package President Donald Trump signed into law in July.

The case is NTEU v. Vought, D.C. Cir., No. 25-05091, 12/17/25.