NCUA Board’s Democrats Latest to Sue Over Trump Firings (2)

The Trump administration is facing a lawsuit from two Democratic board members of the National Credit Union Administration who said they were improperly fired.

President Donald Trump wrongly terminated former NCUA Chairman Todd Harper and board member Tanya Otsuka without providing any cause, the ousted officials alleged in a Monday complaint filed in the US District Court for the District of Columbia.

“The President’s unprecedented and unlawful decision to terminate two-thirds of the NCUA Board legally serving within their Senate-confirmed terms and without providing any cause should concern everyone who uses a federally insured financial institution like a credit union or a bank,” Harper said in a statement.

Harper and Otsuka are the latest Democratic regulators suing the Trump administration over their terminations.

Equal Employment Opportunity Commission member Jocelyn Samuels, National Labor Relations Board member Gwynne Wilcox, Cathy Harris of the Merit Systems Protection Board, and Rebecca Kelly Slaughter and Alvaro Bedoya of the Federal Trade Commission have also challenged their dismissals.

Trump has asked the US Supreme Court to let him fire some of the officials, as part of a broader fight over the president’s power to control independent federal agencies. The high court is also weighing whether to reverse its 1935 Humphrey’s Executor decision that provided some protections to members of independent regulators, including the Federal Reserve and the Securities and Exchange Commission.

“As numerous courts have repeatedly affirmed, the Constitution gives President Trump the power to remove personnel who exercise his executive authority,” White House spokesperson Taylor Rogers said in a statement. “The Trump Administration looks forward to ultimate victory on the issue.”

The NCUA declined to comment. The Treasury Department didn’t immediately respond to a request for comment.

Credit Union Regulator

The NCUA was created in 1970 and originally had a single administrator. In 1978, Congress created the current three-member board, with no more than two members coming from the same political party.

The agency oversees more than 4,000 credit unions with over $2 trillion in assets.

Courts in the past have determined that NCUA board members are subject to the same for-cause removal protections as members of other regulatory bodies, the complaint said.

Trump nominated Harper to fill a Democratic spot on the NCUA board in February 2019 and he was appointed chairman by President Joe Biden in January 2021. His term is set to expire in 2027.

Biden nominated Otsuka in September 2023 and she took office in January 2024, with a term expiring in 2029.

The NCUA board’s structure meant that the agency’s current chairman in Trump’s second term, Republican Kyle Hauptman, was the minority on the board.

Although he won’t be stymied by Democratic objections now that Trump fired the other members, Hauptman may be unable to take substantive actions because of a lack of a quorum, Harper and Otsuka said in their lawsuit.

“Weakening financial watchdogs like the NCUA puts people’s money at risk and makes it harder and more expensive to pay your bills, start a new business, or buy a home,” Otsuka said in a statement.

The two Democrats were fired April 15 in single-sentence emails from Trent Morse, the deputy director of the White House personnel office, that provided no justification.

Both Harper and Otsuka had their government emails shut off before they received notice of their firings, and the email to Harper went to an incorrect address, according to the complaint.

Harper didn’t receive the email until April 17, when it was forwarded to the correct address, the complaint said.

Allowing the termination of the Democratic board members could open the door to eliminating stand-alone credit union supervision, Harper warned.

“Our failure to take these actions could pave the way to the consolidated regulation of credit unions and banks and lead to the demise of our nation’s vibrant credit union movement focused on its mission of meeting the credit and savings needs of members, especially those of modest means,” he said in his statement.

The two Democratic appointees are seeking to be reinstated to the NCUA’s board, among other relief.

No Protection

America’s Credit Unions, a trade group representing credit unions, said in a Monday statement that it believes the NCUA should be run by an independent bipartisan board.

“As the administration has yet to propose nominations to fill the two current vacancies, we continue to engage the NCUA to gain further insights as to what initiatives or actions Chairman Hauptman will take as a one-member board,” Jim Nussle, the trade group’s president and CEO, said in a statement.

Harper and Otsuka will likely have a tougher road to regain their jobs than Democratic appointees at other independent agencies fired by Trump, said Todd Phillips, an assistant professor of legal studies at Georgia State University’s Robinson College of Business and a former Federal Deposit Insurance Corp. attorney.

Congress didn’t specifically give NCUA board members for-cause removal protections, instead only prescribing six-year terms.

Harper and Otsuka in their complaint said courts have traditionally read the six-year term Congress provided as a de facto removal protection.

But the US Supreme Court under Chief Justice John Roberts hasn’t been willing to extend removal protections and in some cases removed those protections entirely, Phillips said.

“In the Roberts court, if there are no removal protections in the statute, that means there are no removal protections,” he said.

Holwell Shuster & Goldberg LLP represent Harper and Otsuka.

The case is Harper v. Bessent, D.D.C., No. 1:25-cv-01294, Complaint 4/28/25.