WASHINGTON — The two members of the National Credit Union Administration board who were removed from the board earlier this year have filed an emergency motion asking a federal appeals court to deny the Trump administration’s request to delay their reinstatement, arguing that a stay would paralyze the agency and harm the credit union system.
As the CU Daily has been reporting, board members Todd Harper and Tanya Otsuka were removed in April ahead of the expiration of their terms, set to expire in 2027 and 2029, respectively. A federal district court in July ruled their removal unlawful and ordered their reinstatement, finding that the NCUA’s structure prevents the president from removing board members without cause.
That ruling allowed Harper and Otsuka to participate in the July NCUA board meeting. But a subsequent ruling just days later removed them from the board again.
In an emergency filing, attorneys for Harper and Otsuka told the U.S. Court of Appeals for the D.C. Circuit that the government has not shown a strong likelihood of success on appeal and that the court should deny the government’s request for a stay pending the outcome of the case.
Congress Wants ‘Independent’ NCUA
The plaintiffs argue that the NCUA Board was deliberately designed by Congress to be an independent financial regulator akin to the Federal Reserve and the Federal Deposit Insurance Corp. They are arguing the board does not wield significant executive power and that insulating its members from political interference is consistent with constitutional precedent.
The further argue that with just one board member remaining—Chairman Kyle Hauptman, a Republican nominee, the board lacks a quorum and cannot carry out key statutory functions, including extending a current exemption to the 15% cap on interest rates charged by credit unions. That exemption expires in March 2026, and a decision to extend it requires a months-long review process that must begin by October, Harper and Otsuka said in their filing.
NCUA has disagreed and argued that a one-person board does qualify as a quorum.
Additional Arguments
Harper and Otsuka’s filing also argues that a stay would harm the plaintiffs by keeping them in employment limbo and potentially moot the case if they are forced to seek other jobs.
By contrast, the government’s argument that reinstating them would harm presidential authority rests on a legal theory the lower court already rejected, the filing said.
The plaintiffs are urging the appeals court to expedite the case and proposed oral arguments be held in September.
Lawsuit Filed in April
The appeal stems from a lawsuit filed in April after the plaintiffs were removed by the White House. They sued Treasury Secretary Scott Bessent and several other federal officials, alleging their terminations violated federal law and constitutional protections. The district court sided with them, permanently enjoining the administration from treating them as removed and requiring their reinstatement.
The Trump administration is seeking to overturn that ruling, arguing that the president must have the power to remove board members. The government has not yet filed its full appeal.
The case is Harper v. Bessent, No. 25-5268, in the U.S. Court of Appeals for the District of Columbia Circuit.
One Prediction Offered
As the CU Daily reported here, one Washington analyst has offered a prediction on the ultimate outcome of the case.
“I do think that ultimately the Supreme Court is going to decide that the president does have the ability and authority to remove those appointees, because he’s nominating them and, ultimately, Congress is confirming them,” Carrie Hunt, chief advocacy officer with America’s Credit Unions, said in response to a question from the CU Daily. “I do think we will end up a place that departs from Humphrey’s Executor…There’s a lot of stake here.”
