NTEU Plaintiffs File for En Banc Review of D.C. Circuit Opinion Allowing CFPB RIF: The Saga Continues
On September 29, 2025, the plaintiffs in the NTEU v. CFPB lawsuit filed a petition for an en banc review of the D.C. Circuit’s August decision (which I wrote about here) rejecting the plaintiffs’ claims and allowing the CFPB leadership’s purported shutdown of the agency, including a planned reduction-in-force (“RIF”).
The NTEU plaintiffs’ lawsuit asks the judiciary to stop the purported decision by the CFPB acting leadership to shut down the CFPB. The D.C. District Court issued a preliminary injunction in March of this year stopping certain actions by the CFPB leadership that it saw as moving towards the elimination of the CFPB (which I wrote about here), which the CFPB appealed. Eventually, after some bouncing back and forth between the D.C. Circuit and the District Court (which I describe here), the D.C. Circuit issued an opinion in August 2025 vacating the District Court’s preliminary injunction and allowing the CFPB leadership’s plans for the CFPB to move forward, which include a potential RIF. The basis of the D.C. Circuit’s decision was essentially that the plaintiffs did not identify a final agency action that would be reviewable under the Administrative Procedure Act (“APA”), the statute that provides for judicial review of agency actions, in part because they could not point to any statement or other official writing in the Federal Register that ordered a shutdown of the CFPB. The D.C. Circuit also held that there was no constitutional claim based on the shutdown. The D.C. Circuit further described the CFPB acting leadership’s moves at the CFPB as temporary pauses that could change, and essentially found that the CFPB’s statutory functions could still take place under the acting leadership’s directives.
Yesterday, the NTEU plaintiffs filed for an en banc review of this D.C. Circuit opinion, which was a split decision by a three-judge panel (one judge dissented). An en banc review means that all of the judges of the D.C. Circuit would review the three-judge panel’s majority opinion. The plaintiffs’ petition for review asserts that Acting Director Vought is attempting to “unilaterally abolish an agency created by Congress.” The plaintiffs argue that the three-judge panel’s reasoning that there was no official statement announcing the shutdown was a “novel rule” that “conflicts with Supreme Court precedent and that of this Court” and “allows any agency to escape judicial review of any decision merely by declining to memorialize it.” Regarding the three-judge panel’s decision on the constitutional claim, the plaintiffs’ argue that it “will render the judiciary incapable of enforcing bedrock separation-of-powers principles.” The plaintiffs also argue that en banc review is “urgently needed” because the D.C. District Court found that, absent a preliminary injunction, the acting leadership “will eliminate the CFPB.” The plaintiffs point to Supreme Court statements from the Seila Law case (which I wrote about here) in which the Court stated that eliminating the CFPB would “trigger a major regulatory disruption and … leave appreciable damage to Congress’s work in the consumer-finance arena.” The plaintiffs argue that “once the CFPB shuts down, it cannot simply be restarted,” and that it would “take years” to rebuild the agency. The plaintiffs also argue that this three-judge panel opinion would allow for the shutting down of other agencies as well.
It remains to be seen whether the D.C. Circuit will grant en banc review. But it will be interesting to see if/how current moves by the CFPB that demonstrate that the agency is conducting certain activities - such as its lengthy Spring 2025 regulatory agenda (which I wrote about here) and the recent statements by a CFPB official at a Mortgage Bankers Association conference in Washington, DC that he expects examinations to resume in a couple weeks - affect the D.C. Circuit’s decision to grant review, or its ultimate decision on the merits. This saga continues. And it could continue much longer, even eventually making its way to the Supreme Court. Unfortunately, the consumer finance industry will have to wait longer for any regulatory certainty regarding the makeup, size, and activity level of the CFPB. Though, it can be viewed as a positive development that the CFPB now appears to be resuming at least some of its statutory functions, such as rulemaking and supervision.
If would you like to discuss any of the issues in this post, or anything else, please email me at rich@garrishorn.com.
