NTEU v. Vought
Established by Congress in response to the 2008 financial crisis, the Consumer Financial Protection Bureau (CFPB) is tasked with overseeing financial institutions and protecting consumers from predatory practices. Since its inception, the agency has recovered billions of dollars for American citizens and helped create a fairer, more transparent financial marketplace. Congress exercised its constitutional authority to regulate commerce when it created the CFPB, ensuring that it operates independently to fulfill its mandate.
In defiance of Congress’s role in our constitutional system and the separation of powers, President Trump declared his intent to “totally eliminate” the CFPB, and Acting Director Russell Vought and the agency are acting quickly to carry out that direction. Their actions have caused mass confusion and imposed significant and irreparable harm on consumers across the country.
Co-counseling with the National Treasury Employees Union (NTEU) and Gupta Wessler LLP, we represent NTEU, National Consumer Law Center, National Association for the Advancement of Colored People (NAACP), Virginia Poverty Law Center, CFPB Employee Association, and Ted Steege, in a lawsuit challenging the unlawful dismantling of the CFPB. We then filed a motion for a temporarily restraining order, asking the judge to block defendants from dismantling the agency. The parties then agreed to temporary relief, and the judge entered an agreed order barring the defendants from firing employees or sending out reductions in force notices, from destroying CFPB data or records, and from defunding the agency while the case proceeds.
After an evidentiary hearing, the court issued a 112-page opinion and order granting our motion for a preliminary injunction, which prevents the defendants from eliminating the CFPB and requires them to undo the steps they have taken to dismantle it, while the case proceeds. Defendants appealed, and on April 3, the D.C. Circuit entered an administrative stay of part of the order, in effect until that court rules on the Defendants’ motion for a stay. On April 11, the court granted in part and denied in part the stay motion, allowing the agency to make individualized determinations about terminating employees but otherwise continuing in effect the provisions of the preliminary injunction that blocked dismantling the agency.
On April 17, Defendants sent out reduction-in-force notices to the vast majority of CFPB employees. That same day, we filed an emergency motion asking the Court to issue an order to show cause why Defendants are not violating the preliminary injunction.