The legal battle over President Donald Trump’s removal of NCUA Board Members Todd Harper and Tanya Otsuka escalated late last week, as both sides filed dueling arguments over how a new Supreme Court decision impacts the case.
Earlier in the week, government attorneys submitted a notice highlighting the Supreme Court’s June 27 decision in Kennedy v. Braidwood Management, Inc. They argued that the ruling reinforces the President’s authority to remove federal agency leaders at will unless Congress explicitly provides otherwise. The Justice Department contended that, like the agency at issue in Braidwood, the NCUA statute contains no express “for-cause” removal protection, meaning Harper and Otsuka could be lawfully removed. Citing the Supreme Court’s language, the filing emphasizes that “‘[m]ere inference or implication’ does not suffice” to create job protections absent clear legislative language.
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But Harper and Otsuka quickly fired back in a strongly worded response Monday, claiming the administration misread the high court’s ruling. They argued that Braidwood addressed a different question: Whether certain federal officials were inferior officers and not whether leaders of independent regulatory agencies are shielded from at-will dismissal.
“The defendants overstate the significance of Braidwood,” the plaintiffs wrote. They maintained that Congress deliberately designed the post-1978 NCUA Board to operate independently from presidential control, citing its bipartisan makeup, staggered terms and quasi-judicial functions as evidence of intended removal protections. Their filing pointed to Supreme Court precedents like Humphrey’s Executor and Wiener, which upheld protections for similarly structured agencies.
The plaintiffs also warned that accepting the Trump administration’s view could undermine the perceived independence of other financial regulators like the Federal Reserve and FDIC, which could raise risks of “financial instability” akin to the Great Depression.
The case remains pending before Judge Amir Ali in the U.S. District Court for the District of Columbia, with a ruling in the case expected soon.
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Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
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