Appeals Court Delays Harper, Otsuka Reinstatement Bid; Trump Administration Ordered To Respond
By CU Today Staff —
WASHINGTON— A federal appeals court has postponed a decision on former NCUA Board Members Todd Harper and Tanya Otsuka’s request to quickly resume their reinstatement appeal, leaving them off the board while directing the Trump Administration to explain by July 29 how the case should proceed.
The D.C. Circuit said consideration of their motion will be deferred, with Harper and Otsuka permitted to reply by Aug. 5. The order does not reject their request or decide whether their April 2025 removals were lawful.
The immediate meaning is that the appeals court wants additional arguments on how two June 29 Supreme Court decisions (Trump v. Slaughter, Trump v. Cook) apply to the NCUA before setting a briefing schedule or reaching the merits. The Justice Department has opposed expedited consideration, saying “the fact that the Supreme Court provided additional clarity does not justify an expedited briefing schedule, particularly when this case has been in abeyance for nearly a year.”
The government also said it is “still sorting out how to proceed in this case and others.”
Harper and Otsuka contend the Supreme Court’s ruling in Trump v. Cook strengthen their case because Congress modeled the NCUA’s structure and financial system responsibilities on the Federal Reserve. The former NCUA board members argue that the Fed ruling preserves protections for institutions with a historically independent role in overseeing the financial system and confirms that courts may temporarily keep an official in office when the requirements for an injunction are met.
But the Supreme Court’s 6-3 Slaughter decision remains a major obstacle. The Court struck down statutory protections that restricted the president’s ability to remove Federal Trade Commission members, ruling that agencies exercising substantial executive authority generally must remain subject to presidential control. As CUToday.info previously reported, legal experts said the ruling likely weakened Harper and Otsuka’s position because the Federal Credit Union Act, unlike the FTC statute, does not explicitly state that NCUA board members may be removed only for cause.
The former board members’ best remaining argument, legal experts state, is that the NCUA belongs within the narrow financial-regulator exception recognized in Cook, where the Court allowed Fed Gov. Lisa Cook to remain in office and emphasized the Federal Reserve’s unique history and central-banking role. However, the NCUA supervises and insures credit unions rather than conducting monetary policy, meaning Harper and Otsuka must persuade the D.C. Circuit that its similarities to the Fed are constitutionally more important than those differences.
Originally reported by CU Today.