WASHINGTON–Whether credit union leaders love or hate the agency, most agree NCUA has been generally consistent in its regulatory focus, with the changes that do take place historically part of a slow evolution. But all that may now change moving forward following a new Supreme Court decision—even as some hold out hope that a portion of the majority opinion may actually support the case filed by two fired NCUA board members.
As the CU Daily reported here, in a 6-3 decision the U.S. Supreme Court significantly expanded presidential authority over the executive branch by holding that statutory restrictions preventing the President from removing Federal Trade Commission (FTC) commissioners except for cause violate the Constitution’s separation of powers.
What all that means is presidents will have the authority to fire members of so-called independent commissions and agencies from the other party. Should a Democrat win the presidency in 2028, that means he or she could fire any Republicans on the NCUA board and replace them with Democrats, which will likely shift the agency’s focus.
The board currently has one member, Republican Kyle Hauptman, who will exit the agency when his successor, John Crews, is approved by the Senate. Crews’ term is supposed to run through 2031, but it could be cut short depending on the outcome of the next presidential election.
Humphrey’s Executor is Overruled
The new Supreme Court ruling expressly overruled the Court’s landmark 1935 decision in Humphrey’s Executor v. United States, which for more than 90 years had served as the constitutional foundation for Congress to insulate many independent regulatory agencies from direct presidential control.
Ann Petros, VP-policy engagement and credit union operations at America’s Credit Unions, called the Supreme Court ruling “unsurprising.”
“When it comes to the 1935 case of Humphreys executor, the court said that Humphreys has applied only to agencies that occupy no place in the executive department and are totally independent of executive authority, really don’t have that type of executive power that we see at the FTC and at other agencies,” Petros said. “So, in short, Humphries has not withstood the test of time and if anything is left of Humphreys, as the court put it, the court overrules it.”
Many believe the new decision likely dooms a lawsuit filed by former NCUA board members Todd Harper and Tanya Otsuka, who took action after Trump removed them from the agency’s board in April 2025. Their legal claims closely mirror those raised by Slaughter. The judge in that case has been waiting on the Supreme Court to rule in the Slaughter case.
Similarities, But…
“While the FTC and NCUA have similarities, this case ruled that the FTC’s ‘for-cause’ removal protection was invalid,” said Petros. “The fact that the Federal Credit Union Act does not even provide an explicit ‘for -cause’ removal protection means that it’s all the more likely that the DC Circuit Court will review this decision and decide that the case before them brought by Todd Harper and Tanya Otsuka does not entitle them to reinstatement on the board at the NCUA.”
One source told the CU Daily there may be a glimmer of hope for Harper and Otsuka in a portion of the majority opinionin which the Court declares that it has “abandoned the notion that there are some powers that are only partly executive,” emphasizing that executive authority belongs exclusively to the President. The opinion further states that the only remaining aspect of Humphrey’s Executor is its observation that agencies exercising no executive power may be treated differently—a category the Court suggests is exceedingly narrow in today’s administrative state.
‘A Bit of Whiplash’
Asked by the CU Daily if the ruling will lead to swings in the regulatory direction of NCUA, Petros said America’s Credit Unions supports a full, three-member, bipartisan NCUA board, which is the “best way for the NCUA to function.”
“But with this removal authority, that does get a little more challenging, not only for the NCUA, but for every agency,” Petros said. “Really, we could be in a situation where we see the removal of heads of agencies after each regime change or administration change. So, with those political headwinds changing, we’re going to see a bit of whiplash, I think.
“But that was already the case because we already have a shift from one administration to another in terms of policies and objectives and priorities,” Petros continued. “So, it’s unlikely that this is going to make a dramatic difference in the way that rulemaking is pursued. But I think we have a little bit of work to do (with) some of the questions related to the NCUA in particular to ensure that the NCUA can function effectively and protect the safety and soundness of the credit union industry.”
While the NCUA board remains at one member, Petros said America’s Credit Unions expects the administration to eventually nominate two addition members.
Details on the Decision
Writing for the majority, Chief Justice John Roberts concluded that FTC commissioners exercise executive power and therefore must remain accountable to the President, who alone is vested with the executive power under Article II of the Constitution. The Court relied on constitutional text, historical practice dating to the First Congress and more recent precedents—including Myers v. United States, Free Enterprise Fund v. PCAOB and Seila Law LLC v. CFPB—to conclude that the President must possess the authority to remove executive officers in order to faithfully execute the laws and remain politically accountable to the electorate.
The majority rejected Humphrey’s Executor’s longstanding distinction between agencies exercising “quasi-legislative” or “quasi-judicial” functions and those exercising executive authority. Instead, the Court concluded that modern administrative agencies such as the FTC investigate violations, enforce federal law and administer congressional statutes—all quintessential executive functions. According to the Court, decades of subsequent decisions had already undermined Humphrey’s Executor, leaving its analytical framework inconsistent with modern separation-of-powers jurisprudence.
‘Poorly Reasoned’
The majority then applies the traditional factors governing stare decisis—whether precedent should be retained or overruled—and concludes that every factor favors overturning Humphrey’s Executor. According to the Court, the earlier decision was poorly reasoned, has proven unworkable, conflicts with subsequent constitutional doctrine and perpetuates a structure inconsistent with Article II.
Beyond NCUA, other independent regulatory agencies include the Federal Deposit Insurance Corporation, the Federal Election Commission, the Securities and Exchange Commission and other multimember commissions that supervise regulated industries, conduct investigations, bring enforcement actions and issue regulations.
The Dissent
Justice Sonia Sotomayor, joined by Justices Elena Kagan and Ketanji Brown Jackson, dissented. The dissent argued that the majority abandoned nearly a century of settled precedent, diminished Congress’ constitutional authority to create independent regulatory bodies and dramatically expanded presidential control over agencies intentionally designed to operate independently from the White House.
