CFPB Preliminary Injunction on Pause: D.C. Circuit Weighs In

As previously reported by Holland & Knight, Judge Amy Jackson of the U.S. District Court for the District of Columbia on March 28, 2025, issued a preliminary injunction and ordered the Consumer Financial Protection Bureau (CFPB) to reinstate all probationary and term employees and refrain from dismantling the agency pending a full trial on the merits. The CFPB filed its notice of appeal on March 29, 2025, subsequently asking the U.S. Court of Appeals for the District of Columbia Circuit to stay the preliminary injunction. After the plaintiffs objected to the CFPB's bid for a stay at the D.C. Circuit, the CFPB filed a motion to stay in the district court on April 1, 2025.

On April 3, 2025, Judge Jackson granted, in part, the CFPB's motion for stay, delaying the agency's obligation to report its compliance with the preliminary injunction pending the outcome of the motion in front of the D.C. Circuit. She denied the remainder of the CFPB's motion. Though Judge Jackson indicated that she would be receptive to "reasonable and appropriate" modifications to the preliminary injunction, she declined to lift her previous order before the parties meet and confer regarding methods of tailoring the injunction.

Shortly after Judge Jackson's order, the D.C. Circuit weighed in on the matter and granted the administrative stay. In a per curiam order, the court expressed that the purpose of the administrative stay is "to give the court sufficient opportunity to consider the emergency motion for stay pending appeal and should not be construed in any way as a ruling on the merits of that motion." In light of the CFPB's representations that absent congressional action, the CFPB will remain open and perform its legally required functions, the D.C. Circuit permitted the brief pause on enforcing the preliminary injunction. The D.C. Circuit is set to hear oral arguments from the parties on April 9, 2025, before further rulings are made.

Though Judge Jackson's order appears, on its face, to be more narrowly tailored than the D.C. Circuit's order, the two work in tandem. The D.C. Circuit's order leaves intact outstanding agreements between the parties concerning contract terminations, preservation of records, employee terminations and funding. In operation, Judge Jackson's order requires the same. The CFPB is expected to maintain its intention to operate its required functions until, at the earliest, further ruling from Judge Jackson and the D.C. Circuit on the merits of the case.

Though the D.C. Circuit has stayed the CFPB's obligations under Judge Jackson's order pending further order, the CFPB has reinstated almost all terminated term and probationary employees. Further terminations of probationary employees may be on hold, as on April 1, 2025, a federal judge in the U.S. District Court for the District of Maryland ordered the CFPB, along with several other government agencies, to stay all terminations of probationary employees and rehire those previously terminated. Judge James K. Bredar previously entered a temporary restraining order halting terminations nationwide. His April 1 preliminary injunction instead applies to government employees residing in 19 states and D.C. The United States has filed a notice of appeal and seeks review of the order by the Fourth Circuit.

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