The Department Of Justice Says CFPB’s Preliminary Injunction Cannot Be Modified

The Justice Department has told a federal district court that it lacks power to change the existing preliminary injunction in the litigation over cuts to the Consumer Financial Protection Bureau’s workforce, so the injunction cannot be modified to force the CFPB to seek more funding.​

What DOJ is arguing

The DOJ’s filing says the district court no longer has jurisdiction to substantively alter its March 2025 preliminary injunction because that order is currently on appeal before the D.C. Circuit. Instead, DOJ characterizes the union’s “motion for clarification” as an impermissible attempt to obtain a new or expanded injunction while appellate review is still pending.​

DOJ also argues that the current injunction does not require the acting CFPB director, Russell Vought, to request funds from the Federal Reserve, and that the court cannot rewrite the order to impose such an obligation now. In DOJ’s view, any clarification should leave untouched the Bureau’s discretion whether or not to ask the Fed for money under Dodd‑Frank.​

Funding, furloughs, and the union’s position

Acting Director Vought has said the CFPB will exhaust its remaining funds in early 2026 and that employees would then be furloughed because he will not request additional funding, relying on a recent Office of Legal Counsel opinion about when the Fed can transfer “earnings” to the Bureau. The union argues that refusing to seek available funds would violate the existing injunction, which was intended to block large‑scale layoffs or reductions in force, and has asked the court to clarify that the order bars that strategy.​

DOJ responds that furloughs due to a lapse in funding are legally distinct from permanent reductions in force, and that the Antideficiency Act prevents agencies from spending money they do not have even if an injunction is in place. It also contends the union is unlikely to prevail in the long run because an earlier D.C. Circuit panel decision favored the administration’s authority to dramatically shrink the CFPB’s staff, subject to ongoing appeals.​

Broader implications

The dispute plays out against a larger fight over the CFPB’s size and independence, including prior challenges to its funding model and the administration’s effort to significantly cut its workforce. If the court ultimately agrees with DOJ that it cannot modify the injunction to require a funding request, the Bureau could hit a funding wall in 2026, triggering furloughs and shifting more consumer‑finance enforcement work to DOJ or other agencies.​

Earlier in 2025, the D.C. Circuit vacated the district court’s broad preliminary injunction against the CFPB and held that the case, as framed, could not proceed in that form.​

Key holdings on the injunction

The court ruled that claims based on CFPB employees’ loss of their jobs must go through the Civil Service Reform Act process (MSPB/FLRA), so the district court lacked jurisdiction over the unions’ employment‑based claims and could not use them to support an injunction. It also held that the remaining plaintiffs’ claims did not properly target “final, discrete agency action” as required by the Administrative Procedure Act, but instead attacked an alleged overarching “shutdown” program, which is not reviewable as such.​

Because of those jurisdictional and APA defects, the panel concluded that none of the plaintiffs’ theories could support the sweeping order the district court had entered and therefore vacated the preliminary injunction in its entirety. The D.C. Circuit emphasized that more limited, properly framed challenges (for example, to specific terminations or specific failures to perform mandatory duties) might be brought through the appropriate statutory channels in the future, but the broad “shut down the CFPB” theory could not sustain injunction-style structural oversight of the agency.​