As previously covered by this Orrick Insight, the U.S. District Court for the District of Columbia on March 28 enjoined the CFPB from “eliminat[ing] the agency before the Court has the opportunity to decide whether the law permits them to do it.” The government promptly appealed her order, and moved for an emergency stay of the order, as well as an administrative stay pending resolution of the motion.

The U.S. Court of Appeals for the District of Columbia Circuit granted an administrative stay, but only to the extent it provided relief that exceeded the parties prior agreements that effectively prevented the termination of employees or contracts, or the deletion of data during the district court proceeding.

The principal basis for the government’s emergency motion to stay was that district court Judge Jackson’s order is overbroad, “sweep[s] far beyond the putative problem it identified,” and effectively freezes the CFPB “as it stood before President Trump’s inauguration.” The government also disputed Judge Jackson’s factual findings, repeatedly asserting that “the Bureau will remain open and continue to perform its statutory functions.”

The plaintiffs’ opposition pointed out that Judge Jackson refused to credit such protestations, but instead found that Acting Director Vought’s “plan to shut the agency down entirely and do it fast remains unchanged, merely paused by judicial intervention.”  The plaintiffs also disputed that the injunction is overbroad, arguing that it does no more than preserve the status quo pending resolution of the case. The government’s reply continued to protest the claimed overbreadth of the injunction.

The motion to stay will be heard by a panel of D.C. Circuit judges — consisting of Judges Pillar, Katas and Rao — on Wednesday, April 9.

Visit our resource center, CFPB Pause: Where From Here?, to stay on top of the latest and what it may mean for the federal and state regulatory and enforcement landscape.