Federal government rejects appeal of court-ordered halt to Consumer Financial Protection Bureau (CFPB) restrictions
The U.S. Court of Appeals for the D.C. Circuit has partially upheld the Justice Department's appeal against Judge Amy Berman Jackson's preliminary injunction on the Consumer Financial Protection Bureau (CFPB). The decision allows the Trump administration to proceed with plans to lay off more than 1,400 CFPB employees.
In a three-judge panel ruling, the court found that the district court lacked jurisdiction to consider claims based on loss of employment. Consequently, the preliminary injunction blocking layoffs was vacated, permitting the CFPB reduction-in-force to move forward. However, Judge Nina Pillard dissented, expressing concern about dismantling the agency by executive fiat.
The parties' arguments centred on the President's constitutional authority to make staffing and regulatory changes at the CFPB. The Justice Department argued that the layoffs are lawful and that the preliminary injunction was an overreach since the plaintiffs lacked standing and failed to show final agency action.
On the other hand, the plaintiffs, including unions and advocacy groups, contend that the agency's wholesale reduction and dismantling violate statutory protections. They argue that the preliminary injunction to halt layoffs was necessary to preserve the agency and protect employees.
The Court of Appeals delayed the mandate of its ruling to allow the plaintiffs to file petitions for rehearing or rehearing en banc. A rehearing en banc (full D.C. Circuit review) is considered likely and could delay the layoffs further.
Notably, the DOJ refuted Judge Berman Jackson's assertion that the CFPB would be dissolved and dismantled completely in approximately thirty days without intervention. The preliminary injunction reinstated fired employees and canceled contracts at the Consumer Financial Protection Bureau.
As the legal battle continues, the case raises significant questions about separation of powers and agency independence. The outcome could have far-reaching implications for the future of the CFPB and similar regulatory agencies.
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