Updated Aug. 15 at 1:22 p.m.

The Trump administration can proceed with its dismantling of the Consumer Financial Protection Bureau, a federal appeals court ruled on Friday, allowing the agency to move forward with widespread layoffs expected to impact virtually its entire workforce. 

The National Treasury Employees Union and other groups that brought the case must instead pursue remedies through avenues specific to federal employees and their unions, the majority on the U.S. Court of Appeals for District of Columbia said in a 2-1 opinion, adding the actions were not yet finalized and therefore not reviewable by the court. The decision overturns a previous injunction by a lower court, which has prevented CFPB from issuing mass reductions in force since February.

The appellate court had in April partially blocked the lower court’s injunction and CFPB prepared to lay off 90% of agency staff, or 1,482 employees. The higher court subsequently said it did not want to police how many employees were necessary to carry out the bureau’s statutory duties, so it temporarily blocked the RIFs from taking place. 

While CFPB staff have remained on the payroll, they have ceased conducting most investigations and their casework has been significantly diminished. The bureau is funded as a percentage of the Federal Reserve’s operating expenses and the recently signed into law One Big Beautiful Bill Act lowered the cap for CFPB from 12% of those expenses to 6.5%. CFPB’s budget was $823 million in fiscal 2025.

The plaintiffs are likely to request an en banc review before the entire D.C. circuit, which could delay the timing of CFPB’s RIFs. 

“We are pleased that the DC Circuit Court affirmed the president’s constitutional authority to shrink this weaponized federal agency and slash the regulations they’ve used to smother the American people," a CFPB spokesperson said. "We look forward to more victories in court on behalf of the president’s agenda.”

The plaintiffs in the case sought relief from a “single, overarching decision to shut down the CFPB,” the majority said in its decision. 

“To remedy that asserted decision, they seek pervasive judicial control over the day-to-day management of the agency, including decisions about how many employees the agency may terminate, how many contracts it may cancel, how it may approve work, which buildings it must occupy, and how employees will complete remote work,” the judges said. 

Such a challenge is “not viable,” they added, arguing an “agency rule” is not reviewable under the Administrative Procedures Act. Even a February email from agency leadership instructing employees that the headquarters building was closed and to avoid conducting any work duties did not constitute a “final agency action,” according to the court’s majority. The judges added the plaintiffs could not prove the Trump administration was seeking to shut down the agency, which the court conceded the administration would not have the power to do. 

The decision was written by Judges Gregory Kastas and Neomi Rao, both Trump appointees. Rao served as head of the Office of Information and Regulatory Affairs in Trump’s first term, which reports to the Office of Management and Budget, which then, as now, was headed by Russ Vought. Vought is currently the acting director of CFPB. 

Doreen Greenwald, NTEU's president, said CFPB has returned $21 billion to consumers in its 14-year history and vowed that her union would continue fighting to allow its members to continue carrying out that work. 

"Today, the U. S. Court of Appeals for the D.C. Circuit inexplicably paved the way for a wide-scale reduction in force and dismantling of operations at the Consumer Financial Protection Bureau," Greenwald said. "This decision could lead to wide-scale firings, which would result in the cessation of the Bureau’s important work protecting consumers."