Ousted Democratic NCUA Board Members Sue Trump Admin Over Firings

The legal challenge to Trump’s firing could shape the future fight for independence of the NCUA, the Federal Reserve and other agencies.

Two senior fiscal regulators who were expelled by President Donald Trump filed a lawsuit Monday seeking reinstatement, alleging that a sudden termination from the National Credit Union Administration (NCUA) committee violated federal law and the U.S. Constitution.

Todd Harper and Tanya Otska both Democrats confirmed the terms of the NCUA board of directors in the Senate and in a 12-page complaint filed in the U.S. District Court for the District of Columbia on April 28, alleged that Trump’s actions were “patently illegal” and that he left federal credit union regulators without quorum.

According to their lawsuit, Trump cannot remove board members of independent agencies without reason, which is a protection that has been incorporated into federal credit coalition law and is granted by decades of Supreme Court precedent. Harper and Otsuka alleged that the termination delivered by the same email on April 15 without explicit reason violated the framework.

“The same one-sentence email sent to both Harper and Otska on the same day did not say anything about the reason for the dismissal and refused to assert the basis for the cause, which he wrote in their complaints.

The plaintiffs are seeking declarative and injunctive relief recognizing ongoing services, blocking federal officials from treating their positions as vacant and regaining the board’s functional capabilities.

The Epoch Times has reached out to the Department of Justice, which represents the defendant in the case, requesting comment.

White House spokesman Karoline Leavitt defended the fire, saying that Trump “reserves the right to fire anyone he wants” within the administrative department.

Following the shooting, only Republican Chairman Kyle Hauptman remains. In a statement on April 18, the NCUA said it could continue to implement all operational and statutory requirements without a second board member, disputing the allegations filed in the suit that the quorum lack has paralyzed the NCUA’s operating capabilities.

“It’s the NCUA’s longstanding view that a single board member constitutes a quorum when there are no other officers,” the NCUA said. “Speaker Haupman and the NCUA leadership have the necessary authorities to continue the administration’s priorities and fulfill our mission.”

“Together we will ensure that American credit unions are safe and sound, address unnecessary regulatory barriers to their prosperity and provide excellent service to the public,” the NCUA added.

Harper and Otsuka are not the first sitting board members removed by Trump. Earlier this year, the president fired a Democrat from the National Labor Relations Committee in January and two Democrats at the Federal Trade Commission in March.

The firing of Harper and Osca and others has sparked vigilance among several consumer rights advocates, Democrats and financial analysts who warned that Trump’s move could foresee broader efforts to eliminate other independent financial regulators.

During his first term, Trump frequently criticized Powell for interest rate policies and sought ways to eliminate him, but ultimately after a legal counsel warned him of a possible legal challenge. With removals at the NCUA and other agencies, analysts say Trump may be laying the foundation for a broader reshaping of financial regulatory bodies.

“The president appears to be approaching justifying the removal of Democrats from the Federal Reserve Commission. By firing two Democrats from credit union regulators, the president has established a precedent that he has full discretion to financial regulators that could include the Federal Reserve.”

In a statement, Adam Rust, director of financial services at the American Consumer Federation, criticized the end of Harper and Otska by “partisan politics” as a takeover by “partisan politics.”