CFPB Motion Details 68% Workforce Cut While Injunction Stays

April 9, 2026

CFPB Workforce Restructuring Plan: New CFPB Motion Details Sweeping Proposed Reductions in Staff Across All Divisions While Injunction Remains in Place

Richard Andreano Jr., Alan Kaplinsky, Joseph Schuster Ballard Spahr LLP + Follow Contact LinkedIn Facebook X Send Embed

A significant new filing on March 31 in the D.C. Circuit Court of Appeals, National Treasury Employees Union v. Vought (Case No. 25-5091), purportedly provides the most up-to-date, detailed picture yet of how leadership of the Consumer Financial Protection Bureau (CFPB) intends to dramatically scale back the agency’s operations—if permitted to do so by the courts. Acting Director Vought adopted, subject to court approval a Workforce Restructuring Plan (WRP) which, he states, “supersedes any and all previous plans regarding reductions-in-force and any prior decisions about the proper size or functioning of the agency that may have motivated any such plans or instructions. Such plans and decisions are null and void. I intend to fulfill CFPB’s statutory obligations in the most efficient manner possible, as the recommended restructuring plan indicates and would permit.”

Based on the WRP, the CFPB filed a motion before the DC Circuit to modify the stay pending appeal of the preliminary injunction barring reductions-in-force entered long ago by the Federal District Court for the District of Columbia (the WRP is attached as an exhibit to the filing). Alternatively, the motion requests the DC Circuit to grant a limited 45-day remand to the District Court with instructions to reconsider its preliminary injunction in light of intervening developments.

Plaintiffs are expected to file their reply brief by April 17 th.

Reasons for Filing the Motion

The motion sets forth three reasons why the Circuit Court should grant this motion.

1. The first reason given by Vought is the WRP (discussed below) is that Vought does not intend to shut down the Bureau, which was the purported legal violation identified by the District Court as the basis for the injunctive relief. According to Vought, “[t]he plan also leaves no doubt that CFPB will continue to perform its statutory obligations as required by law.
2. The second reason is that on July 4 of last year, Congress enacted the One Big Beautiful Bill Act, which substantially reduced the annual cap on funding transfers from the Federal Reserve from 12% to 6.5% of the Federal Reserve’s 2009 expenses, adjusted for inflation. This change limits Fiscal Year 2026 transfers to $466.8 million. However, according to Vought, the annual funding the agency needs to continue complying with the injunction is $677.5 million. In light of the substantial statutory reduction in funding cap, the CFPB expects that by the fourth quarter of calendar year 2026, its cash on hand will no longer be sufficient to comply with the injunction.
3. The third reason is that on June 27, 2025, several months after the District Court issued the preliminary injunction, the Supreme Court decided Trump v. CASA, Inc., 606 U.S. 832 (2025). In that case, the Court held that federal courts generally lack the authority to issue universal injunctions. The Supreme Court ruled that injunctions must be limited to providing “complete relief” to the plaintiffs, rather than enjoining policies for the entire nation. Vought argues that the District Court needs to carefully consider whether the injunction it granted goes beyond that required to provide “complete relief” to the plaintiffs. Breakdown of Reductions Across Core Divisions

The WRP makes clear that the restructuring plan reaches deeply into the CFPB’s core operational functions. The plan would reduce the number of employees from FY 2025, which was 1,723, to 556. That is about a 68% reduction as opposed to about a 90% reduction as contemplated by Vought shortly after he became Acting Director. By virtue of attrition, the table indicates that the headcount now is 1,174. Thus, the reduction based on that number is about 53% Moreover, as stated above, the CFPB’s budget was reduced in the Big Beautiful Bill from 12% to 6.5% of the Fed’s 2009 expenses, which is about a 46% reduction, in and of itself. In this context, the 556 number appears to be reasonable.

Here is a chart which breaks down the staff reductions in each division:

| Division | FY25
Authorized | FY26
Onboard | Retain |
| CONSUMER RESPONSE EDUCATION DIV | 152 | 127 | 90 |
| DIRECTOR | 73 | 62 | 15 |
| ENFORCEMENT DIVISION | 254 | 137 | 50 |
| EXTERNAL AFFAIRS DIVISION | 45 | 30 | 5 |
| LEGAL DIVISION | 87 | 60 | 60 |
| OPERATIONS DIVISION | 341 | 255 | 133 |
| OTHER PROGRAMS | 5 | 11 | 1 |
| RESEARCH MONITORING AND | | | |
| REGULATIONS DIV | 228 | 142 | 125 |
| SUPERVISION DIVISION | 523 | 350 | 77 |
| Grand Total | 1723 | 1174 | 556 |

1.  Research, Monitoring and Regulations Division (RMR)

Although RMR’s retention of 125 employees is only a 43% reduction in staff from the authorized headcount in the 2025 Fiscal Year, and is only a 12% reduction in staff from current staffing, it is still unclear whether that will be sufficient to achieve the very ambitious regulatory agenda which the CFPB established for itself. The agenda includes both two major statutorily-required regulatory initiatives and a host of industry-supported deregulatory initiatives. The two regulations required by Dodd-Frank are (a) open banking (Section 1033 of Dodd-Frank) and (b) data collection with respect to small business loans (Section 1071 of Dodd-Frank). In light of the high attrition from RMR staff during the Chopra era, there is an issue as to whether the staff being retained are qualified to carry out the large and sophisticated regulatory agenda in which many of the final regulations are bound to be challenged in court.

2.  Supervision Division

The Supervision Division, which conducts examinations of banks and nonbanks, is targeted for major cuts:

• The plan contemplates terminating a large percentage of supervisory staff, including examiners.
• Only a fraction of current personnel would be retained. This suggests a fundamental shift away from routine supervisory examinations toward a more limited or targeted oversight model.

The WRP states, in relevant part:

“In line with the Bureau’s revised 2025 Supervision and Enforcement priorities, and consistent with the Dodd-Frank Act, it is also recommended that both the quantity and scope of supervision matters should be reduced, while enabling the Bureau to perform its statutorily required functions. Whereas in 2024, the total number of exams was 107, with 46 at depository institutions and 61 at non-depository institutions, in 2026, the total exams will be 64, with 42 at depository institutions and 22 at non-depository institutions. ‘[T]he public interest in the democratically-elected President’s prerogative to pursue his policy objectives” “bears heavily on” evaluating “whether agency resources should be allocated to facilitate more robust supervision of non-traditional, nondepository, lenders.” NTEU v. CFPB, 774 F.Supp.3d 1, 81 (D.D.C. 2025).’”

Although not mentioned in the WRP, based on prior information provided, we expect most examinations to be virtual in nature and not in person.

In line with the CFPB’s 2025 Supervision and Enforcement Priorities, which we blogged about last year, the following things are highlighted in the WRP:

• Focus on depository institutions. If the CFPB actually examines 42 depository institutions, that represents about 25% of the total number of depository institutions subject to supervision by the CFPB. Only 22 out of about 5,000 or so non-depository institutions (less than half of 1%) will be examined
• Focus of exams will be on “actual consumer fraud, and on areas that are clearly within its statutory authority.” The CFPB will not “pursue supervision under novel legal theories” and will avoid “duplicating similar oversight either at the federal or state level.” The supervisory focus will be “on conciliation, correction, and remediation of harms subject to consumer complaints.” New priorities for supervision are;

“ ▪ Providing redress to servicemembers, veterans, and their families;
▪ Mortgages;
▪ Fair Credit Reporting Act (FCRA) and Regulation V data furnishing violations;
▪ Fair Debt Collection Practices Act (FDCPA) and Regulation F violations relating to consumer contracts and debts;
▪ Fraudulent overcharges and fees; and
▪ Inadequate controls to protect consumer information resulting in actual loss to consumers.

Moreover, the Bureau explained that it will focus on actual intentional discrimination with actual identified victims. “Unlike in the past, [the Bureau] will not engage in or facilitate unconstitutional racial classification or discrimination in its enforcement of fair lending laws. That is, the Bureau will not engage in bias assessment supervisions or enforcement based solely on statistical evidence and/or stray remarks that may be susceptible to adverse inference.”

“Matters Requiring Attention (MRAs) will focus on pattern and practice violations of law where there is substantive and identifiable consumer harm or clear violations of the disclosure requirements. . . . In the past, nearly every matter, regardless of its significance, severity, pervasiveness or duration, required an MRA. This resulted in unnecessary and highly burdensome MRAs on supervised entities for matters that could be corrected in the normal course of business and would sometimes include matters that were identified by the entity themselves.”

3.  Enforcement

The Enforcement Division, which is responsible for investigations and litigation, is likewise significantly reduced:

• The restructuring plan calls for substantial personnel reductions, eliminating a large number of attorneys and support staff.
• A smaller enforcement team would remain to handle what the Bureau presumably views as core or statutorily essential cases. The priorities will be very similar to the new Supervision priorities. This aligns with a broader strategy of narrowing enforcement activity, potentially focusing on fewer, high-priority matters. Most of the lawsuits pending at the end of Chopra’s term have been dismissed or resolved.

The WRP states that the goal of Enforcement “is to take a collaborative and conciliatory approach. That means that our success is measured by issues resolved, such as by an entity voluntarily undertaking consumer redress and implementing changes to align with the law, instead of number of cases filed that could last years and drain resources on all sides.”

We believe that the number of new enforcement lawsuits will be few and far between and that the CFPB will very seldom seek civil money penalties to resolve an enforcement investigation or lawsuit.

Procedural Posture of NTEU v. Vought

Despite the breadth of the proposed reductions, none of these changes have taken effect and cannot take effect until the District Court or Circuit Court vacates or significantly modifies the injunction

For now:

• The status quo remains in place at the CFPB.
• The restructuring plan is adopted but not implemented.
• The D.C. Circuit’s forthcoming decision with respect to the rehearing en banc or the CFPB’s new motion may determine whether the Bureau may proceed with the WRP. Why This Matters

This filing goes well beyond internal agency management. It tees up a fundamental legal question:

Can an agency dramatically reduce its workforce—including in core functions like complaints, supervision, and enforcement—while still satisfying its statutory mandate?

The CFPB’s position, as reflected in this plan, is clearly yes. Although the plaintiffs have not yet responded to the motion, we expect the plaintiffs to oppose it and argue that such reductions would effectively disable the agency.

Consumer Advocacy Groups React to CFPB Workforce Reduction Filing

Consumer advocacy organizations, including the National Consumer Law Center, Consumer Federation of America, and Americans for Financial Reform, have strongly criticized the CFPB’s recent filing and WRP, arguing that the Plan would significantly weaken the CFPB’s ability to fulfill its statutory mission. In public statements, these groups contend that reducing staffing to minimal levels—such as those reflected in the attached exhibit to the motion—would undermine supervision, enforcement, and consumer complaint handling, ultimately harming consumers and frustrating congressional intent under the Dodd-Frank Act. They also express skepticism of the Bureau’s efficiency rationale and have urged the court to maintain the existing injunction, warning that the loss of personnel and institutional capacity could not easily be reversed.

Professor Jeff Sovern of the University of Maryland Law School states in a recent edition of the Consumer Law & Policy Blog:

“The proposal reduces the Office of Fair Lending and Equal Opportunity to four people. Dodd-Frank says that office is supposed to conduct oversight and enforcement of Federal fair lending laws, coordinate with other Federal agencies and the states, work with private industry and consumer advocates on compliance and education, and give Congress annual reports. Those four people are going to be busier than a two-armed paperhanger, much less a one-armed one, as the saying goes. And that’s without taking into account the administration’s debanking initiatives, which they may be charged with enforcing. That’s just one office. The proposal needs to explain how the Bureau will accomplish each of its statutory obligations with this staffing level. It doesn’t, almost certainly because it can’t.”

Observations

1. Although we think that the CFPB’s motion makes a lot of sense (in light of the new proposed RIF, the new budget cap and the Supreme Court opinion in Trump v. CASA), we doubt that the DC Circuit will at this stage change course abruptly, particularly if the plaintiffs oppose the motion as we anticipate We still believe that the DC Circuit will remand the case to the District Court to reexamine the terms of the injunction but that it will do that based on the record in front of the Court before the motion was filed.
2. We think that the plaintiffs would be wise to agree to a limited remand since they have had a good track record so far with the rulings by Judge Jackson than they have had before the Circuit Court. Judge Jackson may give the plaintiffs the right to conduct discovery regarding the new RIF in order to test whether the number of employees is sufficient to perform the CFPB’s statutory duties. The District Court might also permit the plaintiffs to conduct discovery about whether the people they propose to retain in each division are qualified to perform the tasks assigned to them. The latter is particularly important in the Regs division which, as noted above, has a very ambitious regulatory agenda. We also see the limited remand as a way for the parties to potentially settle this case. While Judge Jackson may tweak the WRP, we think it unlikely that she will make significant changes to it. Courts, in general, are very reluctant to micromanage agencies.
3. We were very impressed by the detail and apparent thoroughness of the revised RIF. It is a huge improvement over the prior RIF. It is clear to us that the CFPB has abandoned any hope of shuttering the CFPB. Based on the WRP, it appears the CFPB now has a fuller understanding of what is statutorily required. It likely will be much harder than it was a year ago for the plaintiffs to ultimately receive the relief provided by the preliminary injunction. We will continue to monitor this case closely as it develops.

[View source.]

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