Federal judge rules Trump’s firing of credit union board members unlawful News
Tony Webster, CC BY 2.0, via Wikimedia Commons
Federal judge rules Trump’s firing of credit union board members unlawful

A US federal judge on Tuesday ruled that President Trump’s firing of two members of the National Credit Union Administration (NCUA) is unlawful, and ordered their reinstatement. The NCUA is an independent agency that regulates credit unions and administers the national insurance fund for credit unions. President Trump fired two Democratic board members, Todd Harper and Tanya Otsuka, from the NCUA in April, leaving the agency with a single board member.

The Federal Credit Union Act (FCUA) governs the NCUA and effectively establishes a three-member board to oversee the agency. Importantly, the FCUA specifically states that the terms of the board members “shall be six years,” with some exceptions that Harper and Otsuka did not fall under. Judge Amir Ali in his order stated that the legislative history and intent were fairly clear: By explicitly adding a term into the FCUA, “Congress’s ‘most obvious purpose’…is ‘to provide the incumbent with some measure of tenure or security against arbitrary removal.'” Before 1978, the NCUA was led by an Administrator and advisory board chair who served “at the pleasure of the President.” By removing this language, the court held that “Congress restricted the President’s power to remove Board members.”

Harper and Otsuka filed suit, challenging their “patently unlawful removal … without any explanation and without any cause.” In a post on LinkedIn, Harper criticized the president’s actions:

The decision of the White House to fire me before the completion of my term is wrong. It violates the bipartisan statutory framework adopted by Congress to protect credit union members and their deposits … This ill-conceived and politically motivated decision to fire me before the end of my term upsets that important regulatory balance and will harm consumers. Today is a sad day for our country and the credit union system.

The decision also examined the removal restriction imposed by the FCUA, which states that “a [board] member may be expelled for cause by a two-thirds vote of a quorum of the directors of the Federal credit union.” The court determined that these “for-cause removal restrictions…do not pose any constitutional problem.” Because the NCUA board “does not exercise substantial executive power,” there is no barrier that blatantly prevents the president from exercising his Article II duties.

Judge Ali ordered the reinstatement of Harper and Otsuka and the provision of “all necessary government facilities and equipment so that they may carry out their duties during their terms as members of the NCUA Board.”

The order comes amidst Trump’s numerous attempts to undermine the current makeup and functionality of executive agencies. The Supreme Court has already contemplated some of these legal challenges, and more are expected to develop.