Full DC Circuit Will Review Trump’s Efforts To Dismantle CFPB

The D.C. Circuit Court of Appeals has agreed that the full court (sitting en banc) will rehear a major case over President Trump’s attempt to effectively dismantle the Consumer Financial Protection Bureau (CFPB) through mass firings and defunding strategies. This rehearing pauses a prior panel ruling that had cleared the way for the administration to proceed with large-scale layoffs and structural rollback at the agency.​

What the D.C. Circuit Did

A three-judge D.C. Circuit panel previously vacated a district court injunction and allowed the Trump administration to move forward with plans to fire most CFPB employees and significantly shrink the agency’s operations. The National Treasury Employees Union (NTEU), which represents CFPB staff, then petitioned for en banc review, arguing the mass terminations amounted to an unconstitutional attempt to shutter an agency Congress created. A majority of active D.C. Circuit judges has now granted that petition, meaning the entire court will rehear the case and the prior panel ruling no longer controls.​

Trump’s Efforts to Dismantle CFPB

The Trump administration’s strategy has combined mass firings, structural downsizing, and attacks on the CFPB’s funding mechanism. Acting CFPB Director Russell Vought has pursued plans to terminate the “vast majority” of CFPB staff and sharply reduce or transfer its enforcement and litigation work, moves critics say would effectively shut the bureau down without repealing its statute. The administration has also taken the position that the CFPB cannot lawfully request funds from the Federal Reserve because of an alleged funding defect, intensifying the bureau’s “funding crisis.”​

Legal Issues at Stake

The central constitutional question is whether the president can unilaterally gut or shutter an agency that Congress has created and funded, simply by firing most employees and refusing to support its operations. Members of Congress and advocacy groups in amicus briefs argue that such actions usurp Congress’s Article I power to create, structure, and eliminate agencies, and violate separation of powers even if the president has broad authority over personnel. The case also tests how courts will police efforts to dismantle agencies indirectly—through staff cuts and defunding—rather than by formally repealing their organic statutes.​

Why En Banc Review Matters

En banc review signals that the D.C. Circuit views the case as exceptionally important for administrative and constitutional law. The full court’s decision will likely set a key precedent on how far a president can go in weakening or dismantling an agency like the CFPB absent explicit congressional authorization. In the meantime, the earlier district court injunction limiting the administration’s dismantling efforts remains a central reference point as the lower court and parties navigate what actions are still blocked.​

The full D.C. Circuit will primarily reconsider (1) whether the federal courts have jurisdiction over the CFPB union’s challenge to Trump’s dismantling plan and (2) whether the alleged dismantling violates separation‑of‑powers limits by effectively abolishing a congressionally created agency through mass firings and defunding. It will also revisit whether the district court’s injunction blocking large‑scale CFPB layoffs was a proper exercise of its equitable power to preserve the status quo while those constitutional questions are litigated.​

Jurisdiction and justiciability

The vacated panel ruling held that the district court lacked jurisdiction because the union’s claims sounded in employment loss and had to proceed through civil‑service channels, and because the plaintiffs had not identified a “final agency action” under the Administrative Procedure Act. En banc, the court will reassess those conclusions, including whether a coordinated plan to fire up to 90% of CFPB staff and restructure the agency is reviewable as a separation‑of‑powers challenge in district court.​

Separation of powers and agency dismantling

The union and amici argue that using mass terminations and defunding to “close down” the CFPB unconstitutionally usurps Congress’s Article I authority to create and define agencies, amounting to an attempted repeal of the CFPB’s organic statute by executive action. The full court will consider how far a president may go in shrinking or disabling an existing agency, and whether courts must be able to enjoin such actions to enforce structural constitutional limits.​

Validity of injunctive relief

The prior dissent stressed that the district court’s injunction maintained the status quo and prevented irreversible harm—namely, destruction of the agency—while legality is resolved. The en banc court will decide whether such forward‑looking relief against mass firings and restructuring is within the district court’s equitable powers and consistent with existing D.C. Circuit precedent on structural constitutional claims.​

Context of funding and shutdown efforts

Although a separate case squarely addresses the legality of the CFPB’s funding cutoff, the funding crisis forms part of the factual context of the dismantling effort that the D.C. Circuit will necessarily consider. The court will be looking at the combined effect of layoffs, transfer of litigation to DOJ, and refusal or limitation of funding in assessing whether the administration is effectively shuttering the bureau without congressional authorization.​