Banking and Finance Law Daily Wrap Up, CONSUMER FINANCIAL PROTECTION BUREAU—NTEU’s reply requests court to grant motion to clarify preliminary injunction, (Dec 16, 2025)

By Donielle Tigay Stutland, J.D.

The NTEU plaintiffs dispute the CFPB and OLS definitions of “combined earnings” and asks the court to clarify for purposes of enforcing the injunction.

In the ongoing National Treasury Employees Union (NTEU) lawsuit challenging the actions of the Consumer Financial Protection Bureau (CFPB), the NTEU plaintiffs have filed a Reply In Support of Plaintiffs’ Motion to Clarify Preliminary Injunction. In the plaintiffs’ original Motion to Clarify, they asked the court to confirm that the CFPB may not justify noncompliance with the injunction by declining to request funds from the Federal Reserve Board (Fed) and that “combined earnings” under 12 U.S.C. § 5497(a)(1) refers to the Federal Reserve System’s total earnings, not a net figure reduced by interest expense.

In their December 15 reply, the NTEU plaintiffs again argue that the statutory text, structure, and history support their definition of “combined earnings,” which means the gross earnings of the Federal Reserve System, from which the Fed “shall transfer” amounts reasonably necessary for the Bureau. The plaintiffs stress that they are not asking the court for new relief, but only for clarification that Vought’s planned work stoppage would violate its existing order (National Treasury Employees Union, et al. v. Vought, et al., No. 1:25-cv-00381- ABJ (D.D.C. Dec. 15, 2025)).

Background. In the ongoing National Treasury Employees Union case challenging the actions of CFPB Acting Director Russell Vought, the CFPB defendants notified the court on Nov. 10, 2025, that they anticipated exhausting available operating funds in early 2026 (see Banking and Finance Law Daily, Nov. 12, 2025). More importantly, the CFPB defendants said they were relying on a Nov. 7, 2025, Department of Justice Office of Legal Counsel (OLC) opinion for their refusal to make an active request for more funding from the Federal Reserve. The implication was that the CFPB would no longer operate without such funding, and consequently, it might no longer be in compliance with the court’s preliminary injunction that stopped Vought from taking actions to wind-down the CFPB.

On Nov. 23, 2025, the NTEU plaintiffs (i.e., National Treasury Employees Union; National Consumer Law Center; National Association for the Advancement of Colored People; Virginia Poverty Law Center; Ted Steege; and the CFPB Employee Association) filed a motion for clarification of the CFPB defendants’ obligations under the court’s Mar. 28, 2025, preliminary injunction. Then, on Dec. 5, 2025, former Federal Reserve officials filed a contemporaneous motion for leave, as amici curiae, to support the NTEU motion for clarification. Their brief argued that the OLC opinion wrongly applied private banking accounting principles to the Federal Reserve System. The former Fed officials asserted the Federal Reserve was both lawfully and practically able to provide whatever request the CFPB might have for operating funds (see Banking and Finance Law Daily, Dec. 8, 2025)).

On Dec. 8, 2025, the CFPB defendants filed their opposition to the NTEU plaintiffs’ motion for clarification of CFPB obligations under the preliminary injunction. On Dec. 9, 2025, the CFPB defendants filed a response to the former Fed officials’ motion for leave to file an amicus brief. On December 10, the court entered a minute order granting amici status leave to the former Fed officials.

On Dec. 10, 2025, Acting CFPB Director Russell Vought and CFPB co-defendants filed their opposition to a recent NTEU motion for clarification of the preliminary injunction the court entered on Mar. 28, 2025. The CFPB contended the NTEU plaintiffs were effectively asking the court to amend the preliminary injunction, which stopped Vought from undertaking specific actions apparently aimed at dismantling the CFPB, while that injunction is stayed pending appeal. The CFPB also argued the NTEU plaintiffs and former Federal Reserve officials were wrong about CFPB legal grounds and duty to request funds from the Federal Reserve for continuing CFPB operations.

Whatever the outcome on the arcane Federal Reserve accounting issues now in play, the CFPB maintained the court could not grant relief in the nature of mandamus to compel Vought to ask the Fed for funds beyond what he had already decided were necessary for the CFPB to carry out its duties. The CFPB defendants had also filed a response to a motion by former Fed officials for leave to file an amicus brief. However, the court reviewed and granted the motion by the former Fed officials for amici status based on their purported specialized knowledge of how the Fed is undoubtedly able to provide whatever “necessary expense” funds the CFPB may request for continuing CFPB operations.

Opposition to clarification. In opposition to the NTEU plaintiffs’ motion for clarification, the CFPB defendants mainly argued the NTEU plaintiffs were functionally seeking a new order to compel Vought to request funding from the Federal Reserve. They also contended the NTEU plaintiffs were incorrect that the “combined earnings” of the Federal Reserve system refers to Fed revenues rather than its profits.

Amici status granted. On Dec. 10, 2025, the court entered a minute order granting the former Fed officials’ motion for leave to file as amici. The court ruled the amici filed a timely response under L. Civ. R. 7(o)(2) pursuant to the date the court established. The court rejected the suggestion that the motion was untimely under internal Department of Justice policy because that does not govern the court. The court also rejected the CFPB assertion that courts typically apply Fed. R. App. P. 29 because a specific rule in the U.S. District Court for the District of Columbia governing amicus status does not impose a time limit. The court invoked discretion to grant leave to file the amicus brief. The court explained the former Fed officials bring specialized knowledge and experience to bear on the CFPB funding questions and had not caused any prejudicial delay. (see Banking and Finance Law Daily, Dec. 10, 2025).

Reply. In their reply, the NTEU plaintiffs first assert that the CFPB defendants’ “interpretation is contrary to the text, context, history, and purpose of Dodd-Frank.” The reply takes issue with the CFPB definition of the phrase “combined earnings” and argues that the CFPB opposition motion fails to “identify even one source, lay or technical, that defines earnings to mean total money earned minus only interest expenses.” The NTEU plaintiffs urge the court to “give the statute the same meaning that the Fed, the Congressional Budget Office, and, until recently, the CFPB itself have always understood it to have: The Fed’s “combined earnings,” available to fund the CFPB, are “all that the Federal Reserve System earns.”

The NTEU plaintiffs’ argument cites to texts to support their definition, including the New Oxford American Dictionary and Black’s Law Dictionary and assert that the defendants fail to have textual support for their definition. Rather, the defendants invoke the “business community[’s]” use of the terms “earnings per share” and “retained earnings.” However, the plaintiffs aver those terms are too different from the relevant phrase under the Dodd-Frank Act: “combined earnings.”

Additionally, the reply asserts that the statutory context does not support the defendants “novel definition” of “earnings.” The reply highlights that both the Dodd-Frank Act and the Federal Reserve Act use the term “profit,” which is what the plaintiffs argue defendants’ “earnings” means in these statutes. Further, the reply indicates that in addition to being inconsistent with the text of related statutory provisions, the defendants’ interpretation of “combined earnings” is inapposite to the statutory scheme that governs CFPB funding itself.

Finally, the NTEU plaintiffs note that the original purpose and the history of the statute was to provide the CFPB a consistent, independent funding source. However, the plaintiffs assert that the defendants’ definition undermines CFPB's independence.

The plaintiffs’ reply concludes that although no modification of the injunction is necessary, the court has jurisdiction and authority to do so if necessary. However, the plaintiffs stress that they are not asking the court for new relief, but only for clarification that Vought’s planned work stoppage would violate its existing order.

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 Consumer Financial Protection Bureau.

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

LitigationEnforcement: CFPB DirectorsOfficersEmployers DistrictofColumbiaNews DoddFrankAct DOGE FedTracker BankingFinance FederalReserveSystem