CFPB And NTEU Jointly Seek, And Obtain, Stay Of Litigation Over Bureau’s Proposed Reduction-in-Force Pending Confirmation Of Brian Johnson

In a noteworthy development in the ongoing litigation challenging the Trump Administration’s efforts to dramatically reduce the Consumer Financial Protection Bureau’s workforce, the CFPB and the National Treasury Employees Union (NTEU) have jointly asked the U.S. District Court for the District of Columbia to temporarily stay proceedings concerning the Bureau’s proposed 2026 reduction-in-force (RIF) plan. On July 10, 2026, the day after the joint motion was filed, Judge Amy Berman Jackson granted the requested stay, while modifying the parties’ proposed schedule for future status reports.

The filing, submitted on July 9, 2026, represents a significant shift in the litigation. Rather than pressing the court to decide whether the Bureau may proceed with its proposed RIF, both sides agreed that the issue should await the Senate’s action on President Trump’s nomination of Brian Johnson to serve as CFPB Director.

Background

As our readers know, Judge Amy Berman Jackson previously entered a preliminary injunction preventing the CFPB from carrying out mass layoffs and other actions that would substantially impair the Bureau’s ability to perform its statutory duties. Following the CFPB’s adoption of a new RIF plan on March 31, 2026, the D.C. Circuit remanded the matter to the district court to determine whether the preliminary injunction should be modified, suspended, or dissolved in light of the revised plan.

Rather than litigating that issue immediately, however, the parties jointly requested that the court postpone consideration.

Why the Parties Wanted a Stay

The principal reason is straightforward. President Trump has nominated Brian Johnson to serve as CFPB Director, and the nomination remains pending before the Senate. According to the parties:

“Mr. Johnson, if confirmed, should be given the opportunity to review the 2026 RIF Plan and decide whether he would like to pursue it.”

Accordingly, the parties asked the court to stay proceedings regarding the RIF until 60 days after Johnson is confirmed. If he is not confirmed by January 3, 2027, the parties proposed that the stay would automatically expire on that date.

The parties also agreed that the existing preliminary injunction will remain fully in effect during the stay, and the CFPB expressly agreed to continue complying with it. Importantly, the requested stay applies only to litigation over the RIF plan and does not affect other issues, including the Bureau’s planned return-to-office directive. Whether the NTEU will challenge the return-to-office directive, which seems like a backhand reduction in force, given the closure of regional offices and the requirement for employees to relocate to Washington, D.C., remains to be seen.

Judge Jackson Grants the Stay

On July 10, Judge Jackson granted the parties’ joint motion. While the court agreed to stay proceedings regarding the Bureau’s proposed RIF, it modified the reporting schedule proposed by the parties.

Specifically, the court ordered that:

• if Brian Johnson is confirmed by the Senate, the parties must file a joint status report within two days of his confirmation; and
• if no CFPB Director is confirmed by January 3, 2027, the parties must file a joint status report on January 4, 2027, advising the court of their respective positions on whether the stay should expire or instead be extended.

The order therefore leaves open the possibility that, if no Director has been confirmed by early January, the stay could be extended rather than automatically expiring as contemplated by the parties’ proposal.

CFPB Says It Can Operate Indefinitely at Current Staffing Levels

Perhaps the most interesting aspect of the filing is an accompanying declaration from CFPB Chief Financial Officer Ngagne Jafnar Gueye.

The declaration states that, under the new statutory funding cap enacted earlier this year, the Bureau now has sufficient financial resources to continue operating indefinitely at its current staffing levels, provided future spending does not increase faster than the Employment Cost Index.

According to the CFO, this improved financial position is attributable to two factors:

• significant cost savings and operational efficiencies implemented by Bureau leadership; and
• natural employee attrition that has reduced personnel costs below what the declaration describes as a previously unsustainable level under the new 6.5% funding cap.

This declaration appears intended to reassure both the district court and the D.C. Circuit that maintaining the existing preliminary injunction will not jeopardize the Bureau’s ability to fund its operations while the nomination process plays out. Previously, Acting CFPB Director Russell Vought had advised the D.C. Circuit that based on the reduction in funding at current staffing levels the CFPB expected to run out of money to operate in the fourth quarter of 2026.

What This Means

Judge Jackson’s order significantly reduces the likelihood of any immediate judicial ruling on the legality of the CFPB’s proposed workforce reduction. Instead, the Bureau’s future staffing levels may ultimately depend more on the policy decisions of a Senate-confirmed Director than on further litigation.

If Brian Johnson is confirmed, he will have the opportunity to evaluate whether to proceed with the March 2026 RIF plan, revise it, or abandon it altogether before the litigation resumes. If his nomination remains pending into early January 2027, the court will determine at that time, after receiving the parties’ positions, whether the stay should continue.

The filing also underscores an important practical reality: notwithstanding earlier concerns that the Bureau’s reduced funding cap could threaten its ability to function, the CFPB now represents to the court that it can continue operating at current staffing levels indefinitely. That assertion could prove significant not only in this litigation but also in the broader debate over the Bureau’s long-term funding and operational capacity.

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