D.C. Circuit Halts CFPB Mass Layoffs; Grants Full Court Rehearing

As the D.C. Circuit evaluates the legality of proposed CFPB layoffs, Stuart Levenbach’s nomination from the OMB serves as a tactical move to maintain Russell Vought as acting CFPB director into June 2026.

The U.S. Court of Appeals for the D.C. Circuit granted a petition from the National Treasury Employees Union (NTEU) for rehearing a case challenging Consumer Financial Protection Bureau Acting Director Russell Vought’s plan for mass layoffs at the agency.

The court also approved a stay of the layoffs while it reviews the case.

The appeals court vacated an earlier decision permitting removal of up to 90% of the bureau’s employees, according to a report on the D.C. Circuit panel’s decision to rehear the case from Bloomberg Law.

“In the now-vacated panel decision, Judges Gregory Katsas and Neomi Rao held that a lower court lacked jurisdiction to consider claims based on loss of employment that the National Treasury Employees Union and co-plaintiffs brought against the administration, and that the plaintiffs failed to target a final agency action under the Administrative Procedure Act,” according to the Bloomberg Law report.

The NTEU and co-plaintiffs filed for review of their case by the full D.C. Appeals panel in September 2025.

Oral arguments in the D.C. Appeals’ panel case are scheduled for Feb. 24, 2026.

CFPB Leadership and Funding

Meanwhile, the Trump administration has nominated one of Vought’s top aides to lead the bureau, which will allow Vought to continue to serve as acting director until mid-June 2026.

Stuart Levenbach, a senior official with the White House Office of Management and Budget, was nominated to lead the CFPB in November 2025.

According to a client alert from Brownstein Hyatt Farber Schreck on the bureau, the nomination provides Vought and CFPB leadership additional time to advance their priorities.

The firm notes in the alert provided to ACA that, “Regardless of the bureau’s leadership or immediate enforcement posture, all existing CFPB regulations will remain in effect. State attorneys general retain authority to enforce many consumer financial protection laws, and numerous statutes provide for private rights of action, ensuring that compliance risk will persist even if federal enforcement activity moderates.”

The Senate Committee on Banking, Housing, and Urban Affairs received Levenbach’s nomination for consideration, which typically includes a hearing before the committee.

In November 2025, the U.S. Assistant Attorney General issued a legal opinion concluding that the CFPB’s funding mechanism to draw from the Federal Reserve is unlawful.

The opinion notifies the U.S. District Court for the District of Columbia in the case of NTEU v. Russell Vought as acting director of the CFPB, that the bureau may not use funding other than Federal Reserve profits or congressional appropriations, ACA International previously reported.

The court filing states that the administration anticipates that the CFPB will continue to operate (at least) through Dec. 31, 2025.

ACA will continue to provide updates on the CFPB leadership following Levenbach’s nomination as well as its funding, including on the ACA Huddle, which will next be held on Jan. 7, 2026, and in ACA Daily.

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