WASHINGTON--Oral arguments were heard this week in the U.S. Court of Appeals for the District of Columbia Circuit for a rehearing in National Treasury Employees Union (NTEU) v. Vought, America's Credit Unions reported.
The case addresses the executive branch’s power to downsize or dismantle a congressionally mandated agency without an act of Congress.
The challenge followed administration actions regarding the CFPB that include funding freezes and layoffs in early 2025, which were halted by a district court judge in March 2025. The appeals court originally vacated the injunction, but ultimately granted this week’s en banc hearing, where the full D.C. Circuit hears arguments.
At issue is whether the executive branch can use such actions to effectively shut down an agency that is required to exist by statute, ACU explained.
The plaintiffs (NTEU) argued that while the president has the power to manage an agency, he does not have the power to abolish one that Congress has mandated by law. The court is weighing whether the administration’s actions constitute a final agency action to abolish the CFPB, which would violate the separation of powers under the U.S. Constitution.
Arguments also focused on the administration’s claims that a federal district court cannot rule on employment-related grievances, that they must instead go through the Civil Service Reform Act’s specialized review process.
It also touched on whether a director has an implicit duty to seek the funding necessary to carry out an agency’s statutory duties, even if they personally disagree with the agency’s mission. This follows the administration’s claim that it could not seek bureau funding from the Federal Reserve, which the D.C. District Court overturned in December, ACU said.
In January, the Office of Management and Budget submitted a $145 million budget request to the Fed to fund the CFPB through the second quarter of 2026.