CFPB Injunction Vacated by DC Circuit in Layoffs Dispute

A three-judge panel of the US Court of Appeals for the District of Columbia Circuit has vacated a preliminary injunction that blocked the Consumer Financial Protection Bureau (CFPB) from proceeding with widespread layoffs.

The case is National Treasury Employees Union, et al v. Russell T. Vought. 

Holland & Knight reports that in a 2-1 ruling, the panel concluded that jurisdictional defects and insufficient claims barred judicial intervention. It allowed the agency to move forward with significant reductions in force.

The dispute originated in February 2025, when the National Treasury Employees Union and other groups challenged CFPB Acting Director Russell Vought’s decision to suspend funding draws, halt supervision and examinations, and temporarily close the Bureau’s headquarters.

Plaintiffs argued that these steps unlawfully attempted to dismantle the agency, violating Dodd-Frank and the separation of powers.

Judge Amy Berman Jackson initially agreed, issuing a preliminary injunction that restricted layoffs. However, the CFPB appealed, and after a series of stays and clarifications, the matter advanced to the DC Circuit.

Writing for the majority, Judge Gregory Katsas determined that claims based on loss of employment fall within the exclusive review structure of the Civil Service Reform Act, depriving the district court of jurisdiction.

The remaining claims also failed under the Administrative Procedure Act because they sought to invalidate an inferred “overarching decision” to close the Bureau rather than a discrete, final agency action.

Judge Cornelia Pillard dissented, warning that the majority’s approach effectively insulates executive decisions that could undermine statutory agencies from meaningful judicial review.

The decision signals a narrowing of the federal courts’ willingness to intervene in agency restructuring disputes. Future challenges to executive-driven reductions may face procedural hurdles, with relief limited to statutory review mechanisms rather than broad equitable claims.