The E. Barrett Prettyman U.S. Courthouse, home of the U.S. Court of Appeals for the District of Columbia Circuit and the U.S. District Court for the District of Columbia. Photo: Diego M. Radzinschi/ALM
A federal judge ruled Tuesday that President Donald Trump acted unlawfully when he removed NCUA Board Members Todd Harper and Tanya Otsuka earlier this year. The decision ordered their immediate reinstatement.
U.S. District Judge Amir H. Ali found that Congress intended to protect NCUA Board members from at-will removal when it restructured the agency in 1978. In his ruling, Judge Ali wrote, “the text and history of the NCUA statute, along with the structure and function of the NCUA Board, confirm Congress restricted the President’s power to remove Board members.”
The court rejected the government's argument that the President maintains unlimited removal authority over such appointees, noting that this reasoning could extend dangerously to other independent regulators such as the Federal Reserve and FDIC.
Harper and Otsuka, whose terms began in 2022 and 2024, respectively, received abrupt termination emails from a White House official in April. The court found that no cause was given for their removal and affirmed that only for-cause terminations are lawful under the NCUA statute.
The ruling barred NCUA leadership from impeding Harper and Otsuka’s duties and mandated their access to all necessary government facilities and resources. The decision underscored the constitutional importance of preserving independence for financial regulatory agencies.
READ MORE: Ruling by Judge Amir H. Ali.
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