Supreme Court Will Not Hear Arguments Over Removal of NCUA Board Members

The Supreme Court’s decision not to hear the Harper and Otsuka case means the appeals court litigation can move forward.

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.”

One of the government’s core arguments, however, is that the NCUA statute does not include language that explicitly limits the president’s removal authority.

“First, the Supreme Court and the D.C. Circuit have repeatedly emphasized that absent a specific provision to the contrary, the power of removal from office is incident to the power of appointment,” Trump’s lawyers argue in part. “The Court has said that to ‘take away’ the power of at-will removal from an appointing officer, Congress must use ‘very clear and explicit language.'”

Attorneys for Harper and Otsuka also requested expedited consideration by the Supreme Court to address their case alongside the Trump v. Slaughter case, which challenges removal protections for Federal Trade Commission commissioners.

“This (Harper and Otsuka) petition presents parallel questions to those in Slaughter, but it also implicates the constitutionality of removal restrictions for agencies that, unlike the FTC, follow in a 'distinct historical tradition’ of independence from the Executive dating back to before the Founding—the same historical tradition that differentiates the Federal Reserve Board from agencies such as the National Labor Relations Board (NLRB) and the Merit Systems Protection Board (MSPB),” attorneys for Harper and Otsuka wrote in their Supreme Court’s petition. “This case thus presents an opportunity for the Court to evaluate the role of history and tradition when it comes to the validity of removal protections, along with considering the continuing validity of Humphrey’s Executor v. United States, 295 U.S. 602 (1935), as it has chosen to do in Slaughter.”

Humphrey’s Executor, a landmark case, held that Congress can give certain federal agencies independence from the president and that their leaders can be fired only “for cause,” such as neglect of duty.

While officials at America's Credit Unions and the Defense Credit Union Council (DCUC) are not taking a position on the legality of the president being able to remove board members without cause, both groups are closely monitoring the legal and constitutional issues stemming from the Trump v. Slaughter case's impact on the decades-old Humphrey’s Executor decision.

“That’s what we’re watching next," said Head of Regulatory Advocacy at America's Credit Unions, Ann Petros. “It is widely anticipated that the Supreme Court will be very critical of Humphrey’s Executor and might just outright overturn that decision.”

In a prepared statement, DCUC's President/CEO Anthony Hernandez said, "Regardless of potential changes involving individual board members, DCUC is focused on ensuring that any future appointments or administrative actions support NCUA’s independence, mission clarity, and its ability to maintain a strong and competitive credit union system."

Previously, Henry Meier, Esq., a credit union industry attorney, said the Supreme Court is using the Slaughter  case to reconsider and most likely overrule Humphrey’s Executor.

“In that case, decided in 1935, the Supreme Court rejected an argument by FDR [Franklin D. Roosevelt] virtually identical to the argument being advanced by the Trump Administration: That ‘for cause’ removal protections for the heads of executive branch agencies violated the President's Executive Branch prerogatives.” Meier said. “The decision by the appeals court to put NCUA's case on hold recognizes that the Supreme Court’s ultimate ruling in Trump, et al. v. Rebecca Slaughter, et al., will determine NCUA's fate as an independent agency.”

READ MORE: The Supreme Court’s Order List.