WASHINGTON— A federal appeals has dealt a defeat to former National Credit Union Administration board members Todd Harper and Tanya Otsuka, ruling that the president may remove members of independent regulatory boards at will — a decision that sharply undercuts their efforts to return to the NCUA.
As the CU Daily reported earlier, the ruling comes after the Supreme Court opted not to hear their case.
In a Dec. 5 decision, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit relied on its newly issued opinion in a separate case involving the National Labor Relations Board and the Merit Systems Protection Board. In that case, the court held that statutory “for-cause” removal protections do not prevent the president from dismissing appointed board members.
‘Same Reasoning Applies’
The panel said the same constitutional reasoning applies to the NCUA, which Congress structured similarly to those agencies. The ruling effectively rejects Harper and Otsuka’s argument that their April dismissals were unlawful because the Federal Credit Union Act requires that NCUA board members be removed only for cause.
The decision is a significant reversal from a lower-court ruling in July that ordered both Democrats reinstated and blocked further presidential removal actions. That ruling temporarily restored Harper and Otsuka to the board, allowing them to participate in the July NCUA board meeting.
Foundation Vacated
The D.C. Circuit’s new opinion vacates the foundation of that ruling and signals that the president’s removal authority supersedes statutory protections for independent-agency officials.
With today’s decision, Harper and Otsuka face a dramatically narrowed path to returning to the NCUA board, according to legal analysts. The pair may still seek Supreme Court review, but the appeals court’s application of its own precedent suggests long odds.
The NCUA continues to operate with a single board member, Chairman Kyle Hauptman, the Republican appointee, even as unresolved governance questions persist about how much presidential control Congress intended over the credit-union regulator.
