Overview
- Several judges pressed the Justice Department’s claim that only the Merit Systems Protection Board can review the layoffs, questioning what courts can do if an agency is being dismantled.
- Deputy Assistant Attorney General Eric McArthur argued employees must go to the MSPB, said the executive cannot abolish the CFPB, and contended the firings were not reviewable final agency action under the APA.
- Union lawyer Jennifer Bennett said the case challenges an unlawful shutdown rather than individual terminations and argued an injunction is needed to preserve the agency’s functioning.
- A district judge halted a plan to lay off about 90% of staff last year, a three-judge panel later reversed for lack of jurisdiction, and the en banc court reinstated the halt and heard arguments Tuesday.
- CFPB remains constrained, with roughly a quarter of its pre-Trump workforce gone, reduced workloads and benefits changes under union challenge, and a new law cutting its funding cap to 6.5% of Federal Reserve operating expenses.