CFPB Responds to NTEU's Request for Rehearing

The U.S. Department of Justice (DOJ) filed a response in opposition to the National Treasury Employee Union's (NTEU) request that the U.S. Court of Appeals for the District of Columbia Circuit reconsider a three-judge panel's decision to allow the CFPB to proceed with reductions in force (RIFs), which would cause nearly 1,400 employees to be fired.

As Holland & Knight previously reported, the NTEU sought an en banc rehearing after Judge Gregory Katsas, writing for the majority and joined by Judge Neomi Rao, ruled that a preliminary injunction entered by U.S. District Court Judge Amy Berman Jackson and enjoining the CFPB from proceeding with RIFs must be lifted as a result of jurisdictional and factual deficiencies surrounding the plaintiffs' claim for relief. Though responses to petitions for rehearing en banc are not permitted as a matter of right, the D.C. Circuit requested a response from the DOJ prior to ruling on the NTEU's petition. The D.C. Circuit's decision to request a response from the CFPB revealed its intent to take seriously, and fully consider, the merits of the NTEU's position against the Trump Administration's opposition prior to determining whether the matter should be brought before the full panel of the D.C. Circuit.

After the D.C. Circuit provided the CFPB 15 days from the entry of its order to respond to the NTEU's petition, on Oct. 7, 2025, the DOJ, on behalf of the CFPB, filed a motion for stay of the response deadline, which was unopposed by the NTEU. The DOJ expressed to the D.C. Circuit that the ongoing federal government shutdown has resulted in a "lapse of appropriations" and prohibits the DOJ "from working, even on a voluntary basis" on a response to the NTEU's petition – effectively precluding compliance with the court's order. The D.C. Circuit, however, was not persuaded, denying the DOJ's motion and requiring a response by the original Oct. 21, 2025, deadline.

Complying with the D.C. Circuit's order, the DOJ submitted its response on Oct. 21, 2025, premised on the NTEU's inference of an overarching decision to eliminate the CFPB. The DOJ maintains the position that the agency's actions and decisions made by Acting Director Russell Vought do not constitute a final agency action and are, therefore, outside of the court's jurisdiction pursuant to the Administrative Procedure Act (APA). The DOJ closely aligned its response with Judge Katsas' opinion and committed to its position that the "panel correctly concluded that abstract plans to take future action are not reviewable under the APA."

If the D.C. Circuit grants the NTEU's petition, the preliminary injunction will remain in effect until the D.C. Circuit reconsiders the matter en banc. If the D.C. Circuit denies the petition, however, the injunction will remain in place for seven days or until a motion for further stay is granted, whichever is later. In the alternative, should the NTEU elect to file a petition for a writ of certiorari with the U.S. Supreme Court, the injunction may remain in place for an additional 90 days if the D.C. Circuit determines that the cert petition considers a substantial question. Though Vought recently expressed that he believes the Trump Administration will successfully shut down the CFPB in the next two to three months, the procedural timeline resulting from the NTEU's petition will preclude any RIFs at the CFPB in the immediate future (and the administration cannot abolish the agency unilaterally).

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