The chances of Todd Harper and Tanya Otsuka returning to the NCUA board faded Monday as the Supreme Court overturned a 91-year-old precedent allowing Congress to protect board members of independent agencies from being fired at will by the president, according to an official at America's Credit Unions.
President Trump fired Democratic appointees Harper and Otsuka without cause in April 2025, leaving Republican appointee Kyle Hauptman as the sole remaining NCUA Board member. Harper and Otsuka sued a few days later in the U.S. District Court for the District of Columbia, seeing reinstatement because they said their positions allowed them to be fired only for cause.
The District Court ruled in favor of Harper and Otsuka in July 2025, but their reinstatement was stayed as the president appealed the decision, which is still under underway.
But a case involving similar issues brought by Rebecca Slaughter, a fired board member of the Federal Trade Commission, was expected to provide a template for the NCUA case.
The Supreme Court on Monday overturned a precedent established by the court in a 1935 ruling in the Humphrey's case that Congress acted within its authority to set up a system that required board members of the FTC to only be fired for cause, protecting them from partisan removal.
In its 6-3 decision, the court tossed out that precedent.
"At this point, all that is left of Humphrey's is its observation that an agency that 'exercises no part of the executive power' need not fall within the rule of Presidential removal," the majority wrote. "If anything more is left of Humphrey's, the Court overrules it. Humphrey's has for decades been a result in search of a rationale."
America's Credit Unions sent out at a statement after the Slaughter ruling repeating its support for the law requiring the NCUA board to have three members, with at least one from a different party than the others.
"We urge the President to put forward nominees for the two vacant seats and will continue to keep credit unions informed as this ruling is applied to the NCUA Board," President/CEO Scott Simpson said.
In a call with reporters, Ann Petros, AmCU's vice president for policy engagement and credit union operations, said the FTC decision seems to apply to the Harper-Otsuka case. Similarities between the FTC and the NCUA were that both have the promulgate laws that have the force of law and both have the authority to pursue enforcement and legal action.
"We support a full, three-member bipartisan NCUA board, and think that's the best way for the NCUA to function, but with this removal authority, it gets more challenging," Petros said.
"The fact that the National Credit Union Act does not even provide an explicit for-cause removal protection means it's all the more likely the D.C. Circuit Court will review this decision in Slaughter and decide that the case before them brought by Harper and Otsuka does not entitle them to reinstatement on the board at the NCUA," Petros said.
"This is a strong indication from the court on how that case should be decided," she said.
She said the decision "is unlikely to make a dramatic difference in how rule-making is pursued."
However, she said it could create a pattern of abrupt changes each time a new president is sworn in.
"We could be in a situation where we see the removal of heads of agencies after each regime change or administration change. We're going to see a bit of whiplash.
"We have a little bit of work to do and some questions with the NCUA in particular to ensure that the NCUA can function effectively," she said.
Jason Stverak, chief advocacy officer for the Defense Credit Union Council (DCUC), said the decision was still being evaluated.
"Credit unions benefit from consistent leadership and regulatory certainty," he said.
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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