A federal appeals court panel has cleared the way for the Trump administration to largely dismantle the work of the Consumer Financial Protection Bureau, lifting a lower-court judge’s injunction that had preserved the agency’s structure — and barred mass layoffs — for months.
The 2-1 ruling, authored by Judge Gregory Katsas, said a series of legal defects in the lawsuit brought by CFPB employees and the NAACP doomed the case and required the district court judge’s blockade to be lifted.
Katsas was joined in the decision by Judge Neomi Rao, another Trump appointee. Judge Cornelia Pillard, an Obama appointee, dissented. The decision may be appealed to the full bench of the D.C. Circuit Court of Appeals or to the Supreme Court.
The ruling is a hard-won victory for the Trump administration after losing repeated rounds in court since March. U.S. District Judge Amy Berman Jackson, an Obama appointee, found that the administration had been attempting to unlawfully shutter the CFPB and blocked the large-scale dismantling, finding that the agency had been unable to perform legally required tasks.
Jackson’s decision followed a two-day hearing in her courtroom that aired deep turmoil and tension within the agency as Elon Musk’s DOGE employees attempted to commandeer the agency’s systems. Emails and other records produced during the court battle shed more light on the chaos unleashed among senior officials, particularly after acting CFPB head Russ Vought called for a stoppage of “work tasks” in February.
The CFPB has also announced that it plans to rewrite a sweeping Biden-era regulation governing financial data-sharing. Crypto executives and financial technology firms have been lobbying Trump to enforce a Biden-era policy that prohibits banks from charging fees for that data-sharing — which fintechs and crypto firms use to power their services and make it easier for customers to set up accounts and move money.
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