Harper, Otsuka Say Supreme Court Rulings Strengthen Case For Reinstatement To NCUA Board
By CU Today Staff —
WASHINGTON—Former NCUA Board Members Todd Harper and Tanya Otsuka are arguing that two recent Supreme Court decisions strengthen their bid for reinstatement, contending the agency belongs within the narrow category of financial regulators that may be protected from at-will presidential removal.
In a 71-page answering brief filed Friday with the U.S. Court of Appeals for the D.C. Circuit, Harper and Otsuka said the Supreme Court’s rulings in Trump v. Slaughter and Trump v. Cook support the district court’s conclusion that President Trump unlawfully removed them without cause.
“The district court was correct, and the Supreme Court’s decisions in Slaughter and Trump v. Cook confirm the soundness of its decision,” their attorneys stated.
While Slaughter generally expanded presidential authority to remove leaders of independent agencies, Harper and Otsuka said the ruling left room for entities following the historical tradition of the First and Second Banks of the United States. They argued NCUA qualifies because Congress modeled its structure on the Federal Reserve, and because the agency serves as a lender of last resort through the Central Liquidity Facility, insures deposits, supervises safety and soundness and manages failed credit unions.
The brief also challenges the government’s assertion that NCUA exercises too much executive power to remain independent. Harper and Otsuka maintained that the Federal Reserve possesses substantially similar rulemaking and enforcement authority—and in some respects greater power because NCUA must rely on the Justice Department to enforce matters in federal court. If any NCUA authority is found unconstitutional, they argued, the court should sever that authority rather than eliminate removal protections for board members.
Harper and Otsuka noted the Trump Administration elected to stand on an opening brief filed before the Supreme Court decided Slaughter and Cook. That brief argued the Federal Credit Union Act does not expressly prohibit the president from removing NCUA board members and that courts lack authority to reinstate officials removed by the president. Harper and Otsuka countered that Cook, which allowed Fed Gov. Lisa Cook to remain in office while her case proceeded, undermines both positions.
As CUToday.info recently reported, the D.C. Circuit returned the case to its active docket Aug. 5 after holding it in abeyance while awaiting the Supreme Court rulings. The appeal is not yet scheduled for oral argument. Harper and Otsuka’s seats remain vacant following President Trump’s designation of John Crews as NCUA chairman. The Trump Administration’s reply brief is due Sept. 18.
Originally reported by CU Today.