Trump’s Mixed Messages on CFPB Set for Grilling by Full DC Court

Appellate judges in Washington will have to determine whether the Trump administration’s moves to dismantle the Consumer Financial Protection Bureau outweigh officials’ public statements that they plan to keep operating a slimmed-down agency.

The full US Court of Appeals for the District of Columbia Circuit is set to hear oral arguments Tuesday in an appeal from the National Treasury Employees Union and other plaintiffs challenging an August decision by a split three-judge panel that paved the way for acting CFPB Director Russell Vought to fire up to 90% of the agency’s staff and otherwise take it apart.

The full appellate court’s eventual ruling will test the limits of the administration’s push to slash federal agencies such as the CFPB that operate under mandates from Congress.

The Trump administration has sent mixed signals about its intentions for the CFPB since taking over.

President Donald Trump last year said the CFPB, created in the aftermath of the 2008 financial crisis, is a “very important thing to get rid of,” and the White House lists “CFPB operations halted” among its first-year achievements.

Vought as acting chief froze the agency’s work, canceled contracts, closed offices, refused to request additional funding, fired probationary employees, and made several efforts to lay off almost everyone else.

In court, however, the administration argues it has always intended to continue performing the CFPB’s statutory duties, such as running a consumer complaint database. It says a federal judge in Washington overstepped her authority by blocking Vought’s efforts to “streamline” the agency and that there was never a final agency action for the plaintiffs to challenge under the Administrative Procedure Act.

Those competing narratives will complicate the full DC Circuit’s considerations, said Alan Kaplinsky, a senior counsel at Ballard Spahr LLP who advises banks and other lenders.

“The case is in such a convoluted state right now,” he said.

Minimum Requirements

The CFPB can point to several developments following the appellate panel’s August 2025 ruling to argue it doesn’t plan to kill the CFPB, even though Vought said on a conservative podcast last October that he expected to shutter the agency within months.

Vought last month requested $145 million to fund the agency through March, after Judge Amy Berman Jackson of the US District Court for the District of Columbia rejected the administration’s novel claim that it couldn’t seek more funding from the Federal Reserve because the central bank lacked “combined earnings” under the 2010 Dodd-Frank Act.

The CFPB separately moved to at least cosmetically restart examinations of banks and other financial companies—including requiring examiners to recite a “humility pledge”—as mandated by the 2010 financial regulatory overhaul.

The agency is also pursuing an ambitious rulemaking agenda that includes rewriting a complex open banking rule required by Dodd-Frank and defanging fair lending enforcement.

The CFPB last November said it planned to transfer all active litigation to the Justice Department while its funding dwindled, but court dockets so far don’t reflect the move and the agency has since received the cash.

That initial funding request should bolster the Trump administration’s legal arguments, Kaplinsky said.

“It shifts the case from whether or not the executive is nullifying a statute to whether it is entitled to downsize, and even significantly downsize, an agency while still keeping it alive in some fashion,” he said.

Trust But Verify

One problem for the DC Circuit is whether the judges are able to believe the Trump administration’s claims about preserving the CFPB.

Jackson repeatedly admonished the CFPB and the Justice Department for making false statements about their actions during proceedings before her. “The Court is left with little confidence that the defense can be trusted to tell the truth about anything,” she said in her ruling last year blocking the administration’s moves.

The White House on Feb. 17 released a study claiming the CFPB raised borrowing costs for American consumers, although consumer advocates and academics questioned the administration’s methodology—deepening their skepticism about its plans for the agency.

Consumer groups in a separate case this month urged a federal judge in California to force the CFPB to request money for the third quarter of fiscal 2026 and beyond. Vought’s letter to the Fed requesting the initial tranche of money suggested he may not seek additional funding for the rest of the year, they said.

The DC Circuit should likewise force the administration to take specific steps to keep the CFPB running, said Christine Hines, the senior policy director at the National Association of Consumer Advocates.

“There’s a lot of fog,” she said.