WASHINGTON — A federal appeals court has sent a legal dispute over planned workforce reductions at the Consumer Financial Protection Bureau back to a lower court, while declining a request by the Trump administration to impose a deadline on a ruling that could determine the agency’s future staffing levels.
The U.S. Court of Appeals for the District of Columbia Circuit ruled Friday that the case should return to U.S. District Judge Amy Berman Jackson, who last year issued a preliminary injunction blocking mass layoffs at the CFPB.
The appeals court also denied a request by Justice Department attorneys to require Berman Jackson to rule within 45 days on the CFPB’s revised workforce reduction plan.
The CFPB proposed in late March eliminating 618 positions, or approximately 53% of its workforce, according to documents filed with the appeals court. Agency officials argued the cuts were necessary to address budget constraints and maintain compliance with statutory requirements.
‘Mathematically Impossible’
“It would be mathematically impossible to comply with the law without a workforce restructuring and reduction,” CFPB Deputy Director Geoffrey Gradler wrote in a March filing.
The National Treasury Employees Union, which represents CFPB employees and is challenging the workforce reductions, called the proposed 45-day timeline “artificial” in an April court filing.
The dispute comes as the CFPB has moved forward with other operational changes. Last month, the agency announced it would end remote work arrangements for most employees and require them to report to its new headquarters, which reportedly has capacity for about 550 workers.
In Friday’s order, four of the D.C. Circuit’s 11 judges said they would have preferred to wait until legal questions pending before the full court were resolved before sending the case back to the district court, according to court documents cited by Banking Dive.
Now up the Judge
The case now returns to Berman Jackson, who will determine whether to modify her earlier injunction and allow the CFPB to proceed with reductions in force.
Supporters of the CFPB viewed the ruling as a victory.
“Last night, the D.C. Circuit rejected the Trump Administration’s latest request to shut down the Consumer Financial Protection Bureau, refusing to lift the injunction that has prevented [acting CFPB Director] Russ Vought from carrying out his plan to eliminate the agency,” Sen. Elizabeth Warren (D-MA) said in a statement.
Warren, who played a key role in the Bureau’s creation as part of the Dodd Frank Act, added that supporters would continue defending the agency, which she said has returned more than $21 billion to consumers harmed by banks and corporations.
Neither the CFPB nor the Justice Department issued a public statement following the ruling.
Union Posts Message in Social Media
Days before the decision, the NTEU wrote on its Bluesky account that the agency’s relocation policy was part of an effort to push employees out of public service and ultimately close the CFPB.
Both the CFPB and the union have asked Berman Jackson to review the agency’s March workforce reduction plan. According to court filings, the proposal would reduce staffing in the bureau’s supervision division, which conducts examinations of financial institutions, by 78%.
The enforcement division, which investigates and pursues legal action against financial institutions, would see staffing reduced by 63% under the plan. The CFPB’s legal division, however, would not face any staffing cuts.
