WASHINGTON — A federal appeals court has ruled that the Trump administration can move forward with massive layoffs at the Consumer Financial Protection Bureau, allowing the reduction of more than 1,400 employees to proceed.
In a 2-1 decision, the U.S. Court of Appeals for the D.C. Circuit vacated a lower court injunction that had blocked the downsizing, leaving about 200 staffers in place at the agency that has been largely gutted by the Trump administration.
Writing for the majority, Judge Gregory Katsas said employment disputes must be handled through the Civil Service Reform Act, not the federal courts. Judge Nina Pillard dissented, warning the ruling effectively lets the White House dismantle the independent agency created by Congress after the 2008 financial crisis, NPR reported.
Union Says It Will Continue Fight
The NPR report noted the decision delays implementation for at least seven days after resolution of any rehearing motions. The National Treasury Employees Union, which represents CFPB staff, has pledged to continue fighting the layoffs, which it argues amount to an unlawful effort to abolish the bureau.
As NPR noted, the Trump administration has described the cuts as an attempt to “streamline” the CFPB, shifting its focus toward banks and mortgage fraud and away from areas such as student loans and digital payments. Meanwhile, critics, including Sen. Elizabeth Warren (D-MA), consumer advocates and the agency’s union, say gutting the bureau will cripple its ability to police financial products and protect consumers.
Appeal Remains Possible
CFPB workers had remained on the job under a district court order, but enforcement actions and cases have already been scaled back. An appeal to the full D.C. Circuit or the U.S. Supreme Court remains possible, NPR said.
