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In a closely watched legal battle over presidential executive power and federal oversight, a federal judge on Thursday denied the Trump administration’s request to stay a court order reinstating NCUA Board Members Todd Harper and Tanya Otsuka.
U.S. District Court Judge Amir H. Ali’s ruling came hours after Harper and Otsuka attended their first NCUA Board meeting following their ouster by President Donald Trump on April 15. Otsuka attended the board meeting in person, while Harper joined virtually from Alpharetta, Ga., where he was attending the AACUC annual conference, Thursday. By Thursday evening, Harper and Otsuka's positions on the board had been added back to the NCUA's "Leadership" page, after being removed in April.
“The NCUA, much like the Federal Reserve and the Federal Deposit Insurance Corporation, regulates private financial institutions,” Ali wrote in his ruling. “Independence from presidential control is arguably important if agencies charged with regulating financial institutions, such as the NCUA, are to successfully fulfill their responsibilities; people will likely have greater confidence in financial institutions if they believe that the regulation of these institutions is immune from political influence.”
Ali’s decision followed his Tuesday order granting summary judgment to Harper and Otsuka, which declared their removals unlawful and immediately reinstated them to their board positions. Government lawyers filed a motion to stay the reinstatement pending appeal, citing the U.S. Supreme Court’s recent stay orders in Trump v. Wilcox and Trump v. Boyle, which involved reinstatements at the National Labor Relations Board and the Consumer Product Safety Commission.
As it did in similar cases, the Trump administration is expected to seek an emergency stay from the U.S. Court of Appeals for the D.C. Circuit or the Supreme Court that would temporarily block the reinstatement ruling of Harper and Otsuka. On Wednesday, government lawyers filed a notice of appeal with the D.C. Circuit.
On Thursday, government lawyers filed a brief supporting the motion to stay Ali’s ruling.
“Wilcox establishes that explicit statutory restrictions on the President’s removal power over executive multimember agencies are likely unconstitutional, and that reasoning applies with even greater force to atextual restrictions like those this Court implied here,” the brief stated.
Government lawyers argued that the NCUA “plainly exercises considerable executive power” through law enforcement, regulation approval and supervisory decisions involving federal policy — similar to the CPSC, NLRB or the Merit Systems Protection Board (MSPB).
Ali, however, found that the NCUA’s primary function is credit union oversight, comparable to the FDIC or the Federal Reserve, “rather than exercising considerable executive power.”
The court noted that the NCUA Board does not resemble agencies such as the NLRB, CPSC or MSPB, as it does not set broad federal policy or oversee executive branch operations, including federal employee appeals like the MSPB.
Peter Strozniak can be reached at pstrozniak@cutimes.com.
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