DC Circuit lifts court order preventing CFPB dismantling

WASHINGTON (CN) — A D.C. Circuit panel ruled Thursday that it would lift a preliminary injunction preventing the Trump administration from dismantling the Consumer Financial Protection Bureau, noting that the government said it would not touch the agency in the meantime.

In the per curiam order, the three-judge panel added that it would leave in place two agreements between the Trump administration and the National Treasury Employees Union, which prevented the mass termination of contracts, employees and funding for the agency.

The panel, made up of U.S. Circuit judges Cornelia Pillard, Gregory Katsas and Neomi Rao — a Barack Obama and two Donald Trump appointees, respectively — is set to hear oral arguments in the case on Wednesday.

In the order, the panel indicated that the stay was meant to allow the court to fully consider the emergency appeal and is not a ruling on the merits of the case.

U.S. District Judge Amy Berman Jackson, an Obama appointee, blocked the Trump administration from dismantling the consumer protection agency — an effort described by employees as a “hostile takeover” by billionaire Trump adviser Elon Musk’s Department of Government Efficiency and personnel from the White House Office of Management and Budget — over concerns its destruction was imminent if the court didn’t act.

In the March 28 order, the judge specifically required the administration to maintain all agency records; reinstate terminated probationary and term employees; not terminate employees without cause; not enforce a stop-work order; ensure employees could perform statutorily mandated functions; maintain the Office of Consumer Response hotline, website and database; rescind contract terminations; and file a status report by Friday.

The Trump administration appealed on Monday, arguing that Jackson wrongfully exceeded her authority and went beyond any warranted relief.

“In effect, the district court has indefinitely frozen CFPB as it stood before President Trump’s inauguration,” the Justice Department wrote in its stay motion. “There is no legal basis for that relief, which stymies lawful reforms and imposes restrictions on an executive branch agency akin to judicial receivership.”

Jackson opened her opinion with quotes from Musk, Office of Management and Budget head Russell Vought and Trump .

“CFPB RIP,” Musk wrote on X, formerly Twitter, on Feb. 7.

“That was a very important thing to get rid of,” Trump said on Feb. 10.

Jackson wrote that if a court didn’t stop them, the administration would likely shutter the bureau, making it impossible to offer any relief to the union, employees or the public.

Her order followed a two-day evidentiary hearing where several employees described how DOGE agents and the White House Office of Personnel Management fired nearly everyone as fast as possible in February.

An employee, using a pseudonym for fear of retaliation, testified that DOGE staff attempted to carry out a mass firing just hours before a Feb. 14. emergency hearing with Jackson, where the parties ultimately agreed to halt any terminations and maintain agency data.

The Justice Department said in its stay motion that the bureau would remain open and continue its statutorily mandated functions unless Congress acts.

Trump has moved to drastically reshape the federal government over the first three months of his second term, targeting federal agencies and freezing federal funding that he deems inconsistent with his policy agenda, leading to an ever-increasing number of lawsuits.

Federal judges around the country have blocked such sweeping actions, often finding that the White House needs congressional approval or that only Congress has the authority to act.

Many such cases have reached the D.C. Circuit in recent weeks, including a challenge to the Trump administration’s use of the Alien Enemies Act to deport 137 Venezuelan migrants accused of being part of the Tren de Aragua gang. 

Chief U.S. District Judge James Boasberg, who blocked further use of the 1798 statute, ordered the administration later on Thursday to explain whether it ignored his March 15 order to halt deportations, which came as two planes flew the migrants to El Salvador.

The Trump administration appealed a D.C. Circuit decision upholding Boasberg’s order to the Supreme Court, setting up the high court’s first review of Trump’s unprecedented use of his executive authority.

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