Appeals Court Temporarily Blocks Mass Firings at Consumer Bureau

Federal judges have again intervened to temporarily stave off mass layoffs at the Consumer Financial Protection Bureau, the watchdog agency that oversees banks and enforces a wide range of consumer protection laws.

On Monday afternoon, a three-judge panel from the U.S. Court of Appeals for the District of Columbia issued a 2-to-1 ruling barring the latest attempt by Trump officials to fire nearly 1,500 workers, around 90 percent of the agency’s staff.

Russell T. Vought, the White House budget office director who is also the consumer bureau’s acting director, first tried in February to fire almost all employees at the bureau, which he has called a “woke and weaponized” agency.

Judge Amy Berman Jackson of the Federal District Court in Washington blocked the move, calling it an illegal attempt to dismantle the agency. Congress created the C.F.P.B. in 2011 to bolster the safeguards for consumer financial products like bank accounts and mortgages, and only Congress can abolish it.

On April 11, the appeals court’s panel unanimously threw out parts of Judge Jackson’s decision, ruling the consumer bureau’s leaders could lay workers off if they decided, after a careful evaluation, that specific employees were not needed to carry out the agency’s legally mandated tasks.

Days later, Mr. Vought’s team sent termination notices to all but 200 workers.

Judge Jackson again blocked the firings and ordered a hearing to determine if the careful assessment required by the appeals court had actually taken place. The government asked the appellate court to cancel Judge Jackson’s hearing and permit the layoffs to go forward.

In recent days, a union representing the bureau staff filed hundreds of pages of internal agency records and employee testimonials to the district court illustrating Trump officials’ hurry to fire workers and predicting that the layoffs would obliterate the agency’s ability to operate.

Members of Mr. Vought’s team have maintained in court papers that they did complete the court-ordered assessment and stood by the conclusion that the agency could function with just 10 percent of its staff.

Citing those “ongoing disputes,” the appellate panel on Monday said it had decided to preserve Judge Jackson’s temporary ban on layoffs until at least May 16, when the appeals court is scheduled to hear oral arguments. That will ensure the bureau’s union and other suing parties “can receive meaningful final relief” if they prevail in court, the judges wrote.

Judge Jackson canceled her hearing, which was to be held on Tuesday, and said she would take no further action on the case until the appeals court ruled.

Judges Gregory G. Katsas, who was appointed to the appellate court by President Trump during his first term, and Cornelia Pillard, an Obama appointee, joined the majority ruling. Judge Neomi Rao, another Trump appointee, dissented.

Bureau workers celebrated the temporary reprieve. “Once again, C.F.P.B. workers have fought back against this administration’s attacks on our consumer protection mission,” Cat Farman, the staff union’s president, said in a written statement.