Judges Grapple With Whether Trump Administration Can Gut CFPB Workforce
A federal appeals court hearing this week underscored the deep legal stalemate over whether the Consumer Financial Protection Bureau can dramatically shrink its workforce under the Trump Administration.
During nearly three hours of oral arguments before the United States Court of Appeals for the District of Columbia Circuit, judges wrestled with a lawsuit brought by the National Treasury Employees Union, which is seeking to preserve an injunction blocking plans to lay off as much as 90-95 percent of the Bureau’s staff. Union attorneys argued the administration’s actions effectively amount to dismantling a congressionally created agency.
“This is a fundamental separation-of-powers claim about the structure and very existence of an agency,” said Jennifer Bennett, the attorney representing the union and its co-plaintiffs, during oral arguments. She argued that mass layoffs and a stop-work order issued in early 2025 demonstrate an effort to shutter the Bureau entirely.
Justice Department attorneys, representing Acting CFPB Director Russell Vought, countered that no final agency decision to eliminate the Bureau had been made. They argued that personnel disputes must be handled through the federal employment system rather than through federal courts.
Several judges expressed skepticism toward both sides. Some questioned whether courts could prevent the executive branch from eliminating an agency created by Congress, while others asked how employees could obtain legal relief if the Bureau ceased functioning before their claims were heard.
The panel also floated the possibility of sending the case back to the district court for further litigation. Such a move would prolong an already year-long legal battle that has bounced between courts while the CFPB’s future remains uncertain.
The case continues to represent one of the most consequential legal challenges surrounding the administration’s effort to scale back the agency established after the 2008 financial crisis.
