Labor & Employment Law Daily Wrap Up, PUBLIC EMPLOYEES—D.C. Cir.: Full court to rehear CFPB shutdown dispute; prior panel judgment vacated, (Dec 19, 2025)

By Shashi Kant, BALLB, LLM.

The court’s decision revives employee and consumer claims, resets briefing, and keeps interim limits on CFPB leadership actions in place.

The U.S. Court of Appeals for the District of Columbia Circuit has granted a rehearing en banc in litigation challenging actions taken by Acting Consumer Financial Protection Bureau Director Russell Vought, vacating a prior panel decision, restoring a partial stay pending appeal, and setting the case for oral argument on Feb. 24, 2026. The appellate court granted a petition for rehearing en banc filed by the National Treasury Employees Union and allied plaintiffs, vacated the Aug. 15, 2025, judgment, and established a revised briefing schedule for the parties and amici. The order states that the partial stay pending appeal entered on April 11, 2025, and later modified on April 28, 2025, remains in effect (National Treasury Employees Union v. Vought, No. 25-5091 (D.C. Cir. Dec. 17, 2025)).

Warren statement. Following the order, Senate Banking, Housing, and Urban Affairs Committee Ranking Member Elizabeth Warren stated that the D.C. Circuit’s decision to rehear the case en banc prevents Acting CFPB Director Vought from carrying out what she described as a plan to “close down” the CFPB. Warren stated that the case concerns an attempt by the administration to dismantle an agency created by Congress and that the court’s review will determine whether those actions comply with the law. She further stated that the CFPB has returned more than $21 billion to consumers and that continued judicial oversight is necessary to prevent harm to families.

Background. The en banc proceeding arises from litigation brought by the National Treasury Employees Union and other plaintiffs challenging actions taken by Acting Director Vought that they contend amount to an unlawful dismantling of the CFPB. In March 2025, a federal district court entered a preliminary injunction restricting actions to wind down the Bureau, including workforce reductions, after concluding that the administration’s actions disregarded congressional intent in creating the CFPB. On Aug. 15, 2025, a divided D.C. Circuit panel vacated that preliminary injunction and held that the plaintiffs’ claims were either barred by the Civil Service Reform Act or did not challenge final agency action reviewable under the Administrative Procedure Act (see Banking and Finance Law Daily, Aug. 18, 2025).

The panel concluded that an alleged decision to “shut down” the CFPB was too abstract to constitute reviewable agency action, while acknowledging that many CFPB functions are statutorily mandatory. Following that decision, the NTEU plaintiffs petitioned for rehearing en banc, arguing that the panel’s reasoning conflicted with Supreme Court and D.C. Circuit precedent and insulated executive action from judicial review by allowing agencies to avoid review through the absence of formal documentation (see Banking and Finance Law Daily, Sept. 30, 2025). The petition asserted that eliminating a congressionally created agency without authorization raises separation-of-powers concerns subject to judicial review.

Separately, in November 2025, the CFPB informed a federal district court that it could not request additional funding from the Federal Reserve based on a Department of Justice Office of Legal Counsel opinion concluding that the Federal Reserve lacked “combined earnings” available for transfer under Dodd-Frank, and that the Bureau expected to exhaust its available funds in early 2026 (see Banking and Finance Law Daily, Nov. 12, 2025). That funding position has been challenged in parallel litigation, including a separate action filed by nonprofit organizations in the Northern District of California (see Banking and Finance Law Daily, Dec. 8, 2025).

The case is No. 25-5091.

Judge: Per Curiam.

Attorneys: Jennifer D. Bennett (Gupta Wessler) for National Treasury Employees Union, National Consumer Law Center, National Association for the Advancement of Colored People, Virginia Poverty Law Center, Eva Steege, and CFPB Employee Association. Eric D. McArthur, Deputy Assistant Attorney General, U.S. Department of Justice, for Russell 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

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