Appeals court agrees to rehear CFPB union’s case

A federal appeals court has agreed to rehear the Consumer Financial Protection Bureau (CFPB) employees’ union case en banc, throwing out an earlier decision that would have allowed the Trump administration to proceed with mass firings at the agency.​

What the court just did

The U.S. Court of Appeals for the D.C. Circuit granted the National Treasury Employees Union’s (NTEU) petition for an en banc rehearing and vacated a prior 2–1 panel ruling that had favored acting CFPB Director Russell Vought. The earlier panel decision had said Vought had broad authority to fire up to roughly 90% of CFPB staff and had dissolved a district court injunction that was blocking widespread layoffs.​

Why the case matters

The lawsuit centers on whether the Trump administration effectively tried to dismantle the CFPB through mass terminations, funding freezes, and contract cancellations, even without any formal written policy announcing a shutdown. The union and supporting amici argue that only Congress can shut down an agency it created, and that using sweeping firings to neutralize the CFPB violates both statutory limits and separation-of-powers principles.​

Current status and next steps

By granting rehearing en banc, the full D.C. Circuit will now reconsider the case, and the panel’s August judgment is no longer in effect. A partial stay tied to the earlier district court injunction remains in place, and the court has set a tight briefing schedule, with oral argument currently scheduled for February 24, 2026.​

Who is involved

The plaintiffs are the NTEU and CFPB employees, while the defendants are Vought and the CFPB, represented by the Department of Justice. Dozens of lawmakers and more than 40 nonprofit organizations filed amicus briefs urging rehearing, which the court cited in its order agreeing to revisit the case.​

Broader implications

The outcome could shape how far presidents and agency heads can go in using mass layoffs or de-funding to neutralize agencies without explicitly abolishing them. It is also being watched as a test of what kinds of informal or unwritten plans by top officials can be reviewed by courts under administrative and constitutional law.​