The Court of Appeals for the District of Columbia Circuit in a split decision Friday held that the US government’s mass layoffs of Consumer Financial Protection Bureau (CFBP) employees are within its executive powers, vacating a preliminary injunction.

In the majority opinion, District of Columbia Circuit Judge Gregory Katsas held that all claims by the National Treasury Employees Union (NTEU) against the director of the US Office of Management and Budget, Russell T. Vought, failed as a matter of law, and that the district court lacked jurisdiction.

In a dissenting opinion, Judge Cornelia Pillard stressed that in essentially ordering the bureau to shut down, the president “acted without any statutory authorization whatsoever.” Pillard added that the dismantling of the CFBP would amount to appropriation of legislative power, which constitutionally belongs to Congress and not the president.

Pillard concluded that the crackdown was completely purposeless, and if a preliminary injunction in early 2025 had not been in place, the “the CFPB would have [not] existed by the end of March.”

The CFPB, established by the Dodd-Frank Act in 2010 against the background of the financial crisis, has the objective of ensuring adherence to 18 financial consumer protection statutes, and investigate potential violations.

Although not without its controversy, including a lawsuit against the CFPB on behalf of student loan borrowers, the bureau’s enforcement actions have resulted in $19.7 billion in consumer relief and $5 billion in civil money penalties.

The Trump administration described the CFBP as “another woke, weaponized arm of the bureaucracy that leverages its power against certain industries and individuals disfavored by so-called ‘elites,'” and ordered a full dismantlement of the bureau on Feb. 3, spearheaded by Vought and Elon Musk.

In early February, many of the bureau’s employees were fired or subject to “stop-work orders,” leading to an 80 percent decline in complaints submitted to companies by the CFBP. In the wake of the layoffs, major litigation efforts by the bureau, such as its lawsuit against payment platform Zelle, were dropped.

Amid the firing spree in February, District of Columbia Senior Judge Amy Berman Jackson ordered the halt of the administration’s plan to “totally eliminate” the agency. In her decision, Jackson criticized the government’s efforts, claiming they violated “a clear congressional mandate for the agencies’ existence in the Dodd-Frank Act.”

In April, the Court of Appeals for the District of Columbia Circuit granted a further preliminary injunction while awaiting a pending district court decision.

Even with the injunction vacated, the White House cannot start its efforts immediately. The NTEU has 45 days to request that the case be reheard by the appeals court.