The U.S. Court of Appeals for the District of Columbia Circuit on Oct. 6, 2025, mandated that the CFPB file a response to the National Treasury Employees Union's (NTEU) petition for rehearing en banc of a three-judge panel's order vacating a preliminary injunction that halts any attempt to dismantle the CFPB.
The D.C. Circuit initially provided the CFPB 15 days from the entry of its order to respond to the NTEU's petition filed on Sept. 29, 2025, as Holland & Knight previously reported. Notably, responses to petitions for rehearing en banc are not permitted as a matter of right. Rather, the court, in its discretion, may request responses when necessary based on the needs of the case and the dispute at issue.
The D.C. Circuit's decision to request a response from the CFPB indicates that it intends to take seriously, and fully consider, the merits of the NTEU's position against the Trump Administration's opposition prior to determining whether the matter should be brought before the full panel of the D.C. Circuit.
Upon response from the CFPB, the D.C. Circuit will primarily consider the NTEU's argument that the panel's decision would "allow[] the Executive Branch to alter the fundamental structure of our government without congressional authorization or judicial review," and result in "far-reaching" and "dangerous" implications beyond its impacts to the CFPB, balanced against the Trump Administration's position that jurisdictional and factual deficiencies preclude, as a matter of law, judicial review of plaintiffs' claims. Though the panel's decision identified and vacated the preliminary injunction based on certain jurisdictional and factual deficiencies, its request for response from the CFPB sheds light on the fact that it may see further issues ripe for review in this matter.
Shutdown's Effect and Motion for Stay
The D.C. Circuit's focus on this matter and 15-day response deadline provides an expedited pathway for review, but recent developments within the federal government may stymie that goal. On Oct. 7, 2025, the CFPB filed a motion for stay of the response deadline, which was unopposed by the NTEU. The U.S. Department of Justice (DOJ), on behalf of the CFPB, expressed to the D.C. Circuit that the recent shutdown of the U.S. federal government has resulted in a "lapse of appropriations" and prohibits the DOJ "from working, even on a voluntary basis," on a response to the NTEU's petition – effectively precluding compliance with the court's order. Moreover, as the DOJ "does not know when funding will be restored by Congress," it has requested that the D.C. Circuit grant the stay for the period of the lapse in appropriations, plus an additional 14 days. The DOJ justifies the additional 14 days on the need "to restart regular government operations and finalize a response for filing," given that progress is indefinitely halted. The D.C. Circuit has yet to rule on the DOJ's motion and, therefore, the original response deadline remains in place unless and until the court enters an order providing an amended deadline.
The preliminary injunction, while ordered to be vacated pursuant to the panel's ruling, will remain in effect pending further development with respect to the NTEU's position. If the D.C. Circuit grants the petition for rehearing, the preliminary injunction will remain in effect until the D.C. Circuit reconsiders the matter en banc. If the D.C. Circuit denies the petition, however, the injunction will remain in place for seven days following the denial or until a motion for further stay is granted, whichever is later. In the alternative, should the NTEU elect to file a petition for a writ of certiorari with the U.S. Supreme Court, the injunction may remain in place for an additional 90 days if the D.C. Circuit determines that the cert petition considers a substantial question.
In the interim, in light of the DOJ's motion to stay the response deadline, the preliminary injunction will likely remain in effect through the duration of the government shutdown and until the D.C. Circuit determines whether the petition will be granted. Though this maintains the status quo at the agency, it also stalls the resolution of the Trump Administration's efforts to curtail the scope of the CFPB's authority and operations via reductions in force, a matter that has been highly contentious and already experienced several delays.
As Holland & Knight has previously reported, the CFPB will likely continue its rulemaking quest in furtherance of its lengthy spring 2025 regulatory agenda. Additionally, a recent statement from a CFPB official, made prior to the government shutdown, expressed his expectation that supervisory examinations will likely resume in the coming weeks.
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