WASHINGTON — A federal appeals court will hear arguments this afternoon a closely watched dispute over efforts to sharply reduce staffing at the Consumer Financial Protection Bureau, a case that could shape the agency’s future and test the limits of executive authority over congressionally created regulators.
The U.S. Court of Appeals for the District of Columbia Circuit scheduled oral arguments before the full court, known as an en banc rehearing, after vacating an earlier panel decision and agreeing to reconsider claims brought by the National Treasury Employees Union and allied groups.
About the Suit
The lawsuit challenges actions taken after Russell Vought was installed as acting CFPB director in February 2025 and moved to scale back the agency’s operations and workforce. The union alleges those steps amounted to an unlawful attempt to dismantle an agency that Congress created following the 2008 financial crisis.
“The issue…is whether the preliminary injunction and that pause should stay in place while the litigation works itself out and they tackle some of those stormier questions about separation of powers so definitely an interesting case to watch,” said Ann Petros, vice president, policy engagement & credit union operations, said during a call with the media.
What the Court Will Consider
Appellate judges are expected to examine whether the administration’s efforts to restructure the CFPB — including plans that could eliminate a large share of its staff — were permissible exercises of executive authority or violated statutory and constitutional limits.
The appeal stems from litigation seeking to halt terminations and operational changes that plaintiffs argued would effectively shut down the bureau. Earlier court orders had required the CFPB to reinstate employees, maintain systems and contracts, and continue statutory functions while the case proceeded.
As the CU Daily reported earlier, a divided three-judge appellate panel previously cleared the way for significant layoffs, prompting the union to seek review by the full court.
Scale of the Proposed Cuts
The dispute centers on plans that could reduce the CFPB’s workforce by as much as 90%, according to court filings and reports describing the administration’s analysis of how many employees were needed to carry out the bureau’s mission. As the CU Daily has also been regularly reporting, the Trump administration has been actively working to dismantle the Bureau since it took office. Last week, the White Huse published a report that suggested it has cost consumers more than $200 billion.
Union advocates contend the moves would effectively dismantle the agency, while government lawyers have argued leadership is lawfully reassessing priorities and staffing to run a leaner organization.
Procedural Path to the Feb. 24 Hearing
The D.C. Circuit granted rehearing en banc in late 2025, vacating the earlier ruling and resetting briefing while leaving portions of prior interim relief in place during the appeal.
Trade Group’s Position
When it comes to the case, Petros said of America’s Credit Unions, “I think our position is that the status quo remain in place while judges sort through those legal questions, because changing the status quo could only lead to more chaos and confusion and uncertainty.”
