CFPB Funding Cut Could Alter Injunction Calculus at D.C. Circ.

Financial Services attorney Eamonn Moran was quoted in a recent Law360 article about funding cuts to the Consumer Financial Protection Bureau (CFPB) and potential impacts on the agency's ongoing appeal in the U.S. Court of Appeals for the District of Columbia Circuit. The federal budget bill recently passed by Congress and signed by President Donald Trump includes a nearly 50 percent cut to a statutory cap on the amount of money the CFPB may draw from the Federal Reserve each year to pay for its operations. The reduction comes as a federal court injunction is under appeal at the D.C. Circuit for blocking the agency's acting director from carrying out plans to lay off most of its staff and cancel many of its contracts. Mr. Moran said prohibiting layoffs amid the budget cuts could create an unsustainable situation outside the scope of the judges' purview.

"The agency presumably will have to reduce headcount, but there would still be the question of how many people are necessary to satisfy its statutory obligations," he said. "I'm not sure how comfortable the panel would be opining on that ... to say they can go ahead and fire X number of people. That really becomes a policy question, not a judicial question, and who is the best arbiter to figure that out? I think there is skepticism on the panel that this is an area for judges to be getting into."

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