Labor & Employment Law Daily Wrap Up, AGENCY NEWS—Court pauses union lawsuit seeking to block CFPB closure, (Jul 14, 2026)

By Jonathan Anderson

The parties asked to put the lawsuit on hold so that a new agency director, if confirmed, can review whether proposed workforce reductions are necessary.

The judge presiding over a lawsuit seeking to prevent the closure of the Consumer Financial Protection Bureau issued a partial stay of proceedings, pausing the case until after the Senate decides whether to confirm a new agency director. In a joint status report and motion, the parties requested the partial stay, writing that if the new director is confirmed, he should be given an opportunity to review an updated plan to reduce the agency’s workforce. The CFPB’s chief financial officer told the court in an attached declaration that that the agency “now has enough budgetary resources at its disposal to continue performing its statutory responsibilities indefinitely at current staffing levels.” (National Treasury Employees Union, et al. v. Vought, et al., No. 1:25-cv-00381-ABJ (D.D.C. July 9, 2026)).

Background. In February 2025, the National Treasury Employees Union and others sued to restrain Acting CFPB Director Russell Vought, who is also director of the White House’s Office of Management and Budget, and fellow Trump administration employees from “dismantling” the CFPB. The district court granted the union a preliminary injunction, finding a substantial risk that in the absence of injunctive relief, Vought and other defendants would eliminate the CFPB before the court could rule.

Joint status report. On July 9, 2026, the parties filed the joint status report and motion for partial stay of proceedings. The status report noted that on Mar. 31, 2026, the CFPB adopted a new plan for a reduction in force (RIF). The status report also referenced a remand order dated June 19, 2026, from the U.S. Court of Appeals for the District of Columbia Circuit, which directed the district court to consider a request by defendants to modify, suspend, or dissolve the preliminary injunction because of the new RIF plan.

Undergirding the parties’ joint motion for a partial stay is President Donald Trump’s pending nomination of Brian Johnson as CFPB director. The parties wrote that if the Senate confirms Johnson, he should be “given an opportunity to review the 2026 RIF Plan and decide whether he would like to pursue it.”

CFO declaration. In the declaration accompanying the joint status report, Ngagne Jafnar Gueye, CFPB’s chief financial officer (CFO) and assistant director for finance and procurement, wrote that the CFPB “now has enough budgetary resources at its disposal to continue performing its statutory responsibilities indefinitely at current staffing levels, and will continue to do so as long as increases in Bureau spending (relative to FY26 levels) do not outpace the employment cost index.” Gueye attributed the financial position to “the 6.5% statutory transfer cap prescribed in Dodd Frank (equal to $466.8M in FY26).” Gueye further cited “the Bureau’s leadership focus on responsible stewardship of public resources” and “natural attrition bringing the Bureau’s labor cost below what was a previously unsustainable threshold under the new 6.5% cap.”

July 10 order. In an order issued July 10, 2026, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia granted the parties’ joint motion for partial stay. Berman Jackson wrote that if the Senate confirms a new CFPB director, the parties must file a joint status report within two days of the confirmation. Alternatively, if a new CFPB director is not confirmed by Jan. 3, 2027, the parties must file a joint status report by Jan. 4, 2027, advising the court of their positions as to whether the stay should expire or be extended.

Attorneys: Deepak Gupta (Gupta Wessler LLP) for National Treasury Employees Union, National Consumer Law Center, National Association for the Advancement of Colored People, Virginia Poverty Law Center, CFPB Employee Association and Ted Steege. Catherine M. Padhi, U.S. Department of Justice, for Russell T. Vought and the CFPB.

Companies: National Treasury Employees Union; National Consumer Law Center; National Association for the Advancement of Colored People; Virginia Poverty Law Center; CFPB Employee Association

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