CFPB's union appeals agency's 'dismantling' to D.C. Circuit

• What's at Stake: The union's counsel warns that the appellate panel's ruling permits the unilateral elimination of federal agencies. 
• Expert Quote: "It enables agencies to avoid judicial scrutiny of virtually any decision." — Jennifer Bennett, National Treasury Employees Union. 
• Supporting Data: The Trump administration wants the CFPB's headcount cut to 200, down from 1,750 in January under the Biden administration. 

The National Treasury Employees Union has asked a federal appeals court to halt mass firings at the Consumer Financial Protection Bureau, claiming President Trump is trying to dismantle the agency without congressional authorization or judicial review. 

On Monday afternoon, the union filed an appeal to the U.S. Court of Appeals for the District of Columbia Circuit alleging the president is limited by both law and Supreme Court precedent from conducting mass firings to reshape the federal government. 

The saga of the beleaguered CFPB is similar to other partisan showdowns playing out in court as the Trump administration tests the limits of executive power. 

The union's appeal follows a ruling in August by a three-judge panel of the D.C. Circuit that allowed acting CFPB Director Russell Vought to fire 90% of union employees through a federal reduction-in-force. The union had 45 days to appeal and the CFPB is prohibited from issuing RIFs during the appeals process.  

 Jennifer Bennett, who represents the CFPB's union, argued that the president has no authority to gut an agency created by Congress that has legally-mandated functions and oversight of 18 consumer financial protection laws. 

"The Executive has no statutory authority to eliminate the CFPB at all," Bennett wrote in the 143-page appeal. She is requesting an en banc review by the full D.C. Circuit. The Supreme Court has repeatedly undertaken reviews of agency actions under the Administrative Procedure Act, which sets standards for oversight by courts of agency actions.

Politics and policy

How the Trump administration has neutralized the CFPB

September 18, 2025 6:00 AM

Vought's decision to fire most of the agency's employees created both separation-of-powers and APA claims, Bennett said, even though the three-judge panel rejected that argument in August. 

"The defendants have never disputed that the Constitution's separation of powers prohibits the Executive from unilaterally closing an agency," wrote Bennett. "Yet the panel majority held that eliminating an agency does not give rise to a constitutional claim. The decision licenses the destruction of any agency at the whim of the Executive, free from judicial scrutiny."

The appellate panel's 2-1 ruling was decided by two Trump-appointed judges. A third judge, who dissented, was appointed by President Obama. The Trump judges found that actions taken by Vought to fire employees in early February are not subject to judicial review under the APA because Vought did not issue a formal directive about his planned firings. 

Bennett, a principal at Gupta Wessler LLP, argued that the panel's decision conflicts with binding Supreme Court precedent and threatens to make separation-of-powers violations unreviewable.

"The decision empowers the Executive to shut down any agency without congressional authority and shield that decision from judicial review until it's too late," she wrote. "And it enables agencies to avoid judicial scrutiny of virtually any decision, simply by choosing not to memorialize it. These issues are coming up, in case after case. And they are vitally important to our constitutional order. They should be decided by the full Court."

During evidentiary hearings at the district court, CFPB employees disclosed Vought's plan to "right-sizing" the agency by reducing headcount to 200 employees, from 1,750 in January under the Biden administration. CFPB employees estimate that roughly 500 employees have left the agency so far this year.

The two Trump judges also ruled that a district court lacked jurisdiction to consider claims of lost employment by CFPB staff. Instead, the two Trump judges said the CFPB's employees had to go through a specialized review, required by the Civil Service Reform Act, to resolve any federal employment disputes. 

CFPB employees have been paid not to work since February and many of them have said they continue to be shellshocked at being fired, then rehired and fired again during the seven-month court battle. Adding to the drama is that CFPB's employees are preparing to be furloughed due to the expected government shutdown when they will be put on unpaid leave. 

Some experts think Vought will use the impending government shutdown as an opportunity to petition the court to lift an injunction that kept him from firing most employees.

Within days of being named to lead the CFPB in early February, Vought allowed DOGE staffers access to the agency's data. He shut the bureau's headquarters and ordered staff to "stand down," and stop work. 

In April, U.S. District Court Judge Amy Berman Jasckson held evidentiary hearings in which CFPB employees revealed that Vought had created a team in February to fire more than 1,400 employees in two phases. The first RIF's were expected on Valentine's Day, but the union's lawsuit halted the mass firings. The district court found that Vought was engaged in a concerted, expedited effort to shut the CFPB and issued a preliminary injunction that halted the firings. 

"There is reason to believe that the defendants simply spent the days immediately following the Circuit's relaxation of the order, dressing their RIF in new clothes, and that they are thumbing their nose at both this Court and the Court of Appeals," Judge Jackson wrote.