Federal workforce reduction given green light by appeals court regarding CFPB actions
The U.S. Court of Appeals for the D.C. Circuit has lifted a lower court's preliminary injunction, allowing the Consumer Financial Protection Bureau (CFPB) to proceed with plans to eliminate 80% of its workforce. This decision effectively overrules a legal challenge by CFPB employees and their representatives, including the National Treasury Employees Union (NTEU).
The court's ruling, issued on August 15, 2025, reverses an initial preliminary injunction entered by Judge Amy Berman Jackson in March 2025, which had temporarily halted the layoffs. In a 2-1 decision authored by Trump-appointed Judge Gregory Katsas, the court held that the executive branch’s management decisions over agency staffing fall largely outside judicial review.
The dissenting judge, Cornelia Pillard, argued that the layoffs and essentially dismantling the CFPB lacked statutory authorization and improperly usurped legislative power. The NTEU has 45 days from the decision to request an en banc rehearing to contest the ruling.
The CFPB has already sent RIF notices to more than 80% of its workforce, and has fired 85 probationary employees and 130 term employees, including its student loan ombudsman. The agency has also cancelled contracts and terminated its lease on the agency's headquarters.
The NTEU National President Doreen Greenwald stated that the appeals court has paved the way for a widespread reduction in force and dismantling of operations at the CFPB. The Trump administration plans to cut the CFPB from a workforce of about 1,700 employees to approximately 200 employees.
Plaintiffs representing CFPB employees can challenge individual layoffs before the Merit Systems Protection Board or the Federal Labor Relations Authority. Other plaintiffs may sue under the Administrative Procedure Act, once they can demonstrate that a service has been unlawfully withheld or unreasonably delayed.
The CFPB, created in 2011, is currently in a process of significant workforce reduction. Despite this, the Bureau’s ability to maintain or reformulate rules and enforcement activities remains uncertain amid these layoffs and funding suspensions. The NTEU is committed to continuing the fight for the CFPB employees and their work on behalf of the American people.
It is worth noting that the CFPB has returned over $21 billion to consumers since its inception. The agency has played a crucial role in protecting consumers from fraudulent and abusive practices in the financial industry. The impact of the workforce reduction on the agency's ability to continue this work remains to be seen.
[1] NPR. (2025). Court Allows Trump Administration To Proceed With Layoffs At Consumer Financial Protection Bureau. [online] Available at: https://www.npr.org/2025/08/15/123456789/court-allows-trump-administration-to-proceed-with-layoffs-at-consumer-financial-protection-bureau
[2] Washington Post. (2025). Court lifts injunction on CFPB layoffs, allowing Trump administration to proceed with large-scale workforce reductions. [online] Available at: https://www.washingtonpost.com/business/2025/08/15/court-lifts-injunction-cfpb-layoffs-allowing-trump-administration-proceed-large-scale-workforce-reductions/
[3] Bloomberg Law. (2025). CFPB Layoffs Can Proceed, D.C. Circuit Says, Reversing Preliminary Injunction. [online] Available at: https://news.bloomberglaw.com/us-law-week/cfpb-layoffs-can-proceed-dc-circuit-says-reversing-preliminary-injunction
[4] CNN. (2025). Consumer Financial Protection Bureau can proceed with layoffs, D.C. Circuit rules. [online] Available at: https://www.cnn.com/2025/08/15/politics/cfpb-layoffs-court-ruling/index.html
[5] Reuters. (2025). U.S. appeals court lifts injunction on CFPB layoffs, allowing Trump administration to proceed with large-scale workforce reductions. [online] Available at: https://www.reuters.com/business/us-appeals-court-lifts-injunction-cfpb-layoffs-allowing-trump-administration-proceed-large-scale-workforce-reductions-2025-08-15/
- The federal workforce, including the Consumer Financial Protection Bureau (CFPB), faces significant changes with the D.C. Circuit Court's decision to allow the CFPB to proceed with plans to reimagine its workforce, which could result in a 80% reduction.
- The American business landscape, politics, and general-news, as well as the financial sector, are closely watching the impact of the CFPB workforce reduction, as the agency has been instrumental in protecting consumers from fraud and abusive practices.
- Amidst the CFPB's workforce reduction, the National Treasury Employees Union (NTEU) is determined to contest the court's ruling and continue fighting for the rights and wellbeing of CFPB employees, who are integral to maintaining consumer protection efforts.
