According to reports, a federal appeals court has ruled that the Trump administration can advance with mass layoffs at the Consumer Financial Protection Bureau (CFPB).
On Friday, the U.S. Court of Appeals for D.C. lifted a lower court’s preliminary injunction, clearing the way with plans by the Trump administration to eliminate 80% of the Bureau’s workforce through reduction-in-force (RIF) mandates.
The decision overturns a previous injunction by a lower court, which has prevented the CFPB from issuing mass RIFs since February.
According to Federal News Network, the CFPB could lay off approximately 1,500 employees and reduce its staff to around 200 to carry out legally required activities.
Since the inception of the CFPB 15 years ago, the agency has returned approximately $21 billion to more than 200 consumers, including working-class families, servicemembers, veterans, students, and others harmed by predatory institutions.
Government Executive reports that while CFPB staffers have remained on the payroll, the Bureau has stopped conducting most investigations. President Trump’s One Big Beautiful Bill cut the CFPB’s budget nearly in half. Sen. Tim Scott’s markup of the bill restored somewhat of an operating budget to the CFPB, reducing it from 12% to 6.5% of the Federal Reserve System’s 2009 total operating expenses, adjusted for inflation. The updated provisions would decrease the CFPB’s funding cap for a savings of $2 billion, and rescind unobligated funds from the Inflation Reduction Act for green housing initiatives to the Treasury for a savings of $138 million. Another provision would take unused money from the Securities and Exchange Commission (SEC) for technology modernization and eliminate the fund permanently for a savings of $448 million.
In Civil Action No. 25-0381, National Treasury Employees Union v. Russell Vought (in his official capacity as Acting Director of the Consumer Financial Protection Bureau), the National Treasury Employees Union (NTEU) and other groups sued Acting CFPB Director Vought in February over the dismantling of the Bureau, arguing the effort violates the separation of powers between the branches of government. NTEU represents more than 1,000 frontline employees.
The decision was written by Judges Greogry Kastas and Neomi Rao, both appointees of President Trump. Judge Rao served as head of the Office of Information and Regulatory Affairs in Trump’s first term, which reports to the Office of Management and Budget (OMB) led by Vought.
In a dissenting opinion, Judge Cornelia Pillard, a President Obama appointee, said Trump has the authority to run CFPB in whatever way he deems best serves the public interest.
“My colleagues nonetheless vacate the preliminary injunction because they deem the decision to unilaterally abolish the CFPB not a type of agency action we are authorized to review,” wrote Judge Pillard. “That constricted view of our statutory and equitable power contravenes statutes, precedent, and basic principles of our constitutional government. Congress created the CFPB, assigned it important missions and powers, and subjected its decisions to the strong presumption of judicial review that applies as a matter of course to the final actions of federal agencies. It is untenable to hold that same Congress meant the agency’s continued existence to be a matter of unilateral and unexplained presidential edict. The notion that courts are powerless to prevent the President from abolishing the agencies of the federal government that he was elected to lead cannot be reconciled with either the constitutional separation of powers or our nation’s commitment to a government of laws. I respectfully dissent from the decision vacating the district court’s amply supported preliminary injunction.”
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