Supreme Court Hands Trump FTC Firing Power, Casting Shadow Over NCUA Case
By CU Today Staff —
WASHINGTON—In a landmark ruling that could reshape the independence of federal regulatory agencies, the U.S. Supreme Court ruled Monday that President Trump has the constitutional authority to remove Federal Trade Commission commissioners at will, striking down the agency's decades-old statutory job protections and overturning its 1935 Humphrey's Executor precedent.
In a 6-3 decision written by Chief Justice John Roberts, the Court held that the FTC's provision allowing commissioners to be removed only for "inefficiency, neglect of duty, or malfeasance in office" violates the Constitution's separation of powers because the commission exercises executive power. The ruling reverses lower court decisions that had ordered FTC Commissioner Rebecca Slaughter reinstated after President Trump removed her in 2025.
"The FTC unquestionably exercises executive power and must therefore be controlled by the Chief Executive," Roberts wrote. The Court concluded that the President must have the authority to remove officials who exercise executive power in order to fulfill the Constitution's requirement that the President "take Care that the Laws be faithfully executed."
The decision expressly overrules Humphrey's Executor v. United States, the 1935 ruling that had long served as the constitutional foundation for independent regulatory agencies whose leaders could be removed only for cause. Justice Sonia Sotomayor dissented, joined by Justices Elena Kagan and Ketanji Brown Jackson.
The Court stopped short of extending its holding to every independent agency, however. Roberts specifically noted that the Court was not deciding whether similar removal protections for the Federal Reserve are constitutional, citing the Fed's unique historical role and stating that question would be left "for another day."
That reservation could prove significant for other financial regulators, including the NCUA, as litigation over the independence of federal agencies continues.
The ruling is expected to significantly weaken the legal position of former NCUA Board Members Todd Harper and Tanya Otsuka, whose lawsuit challenging their 2025 dismissals has been on hold pending the Supreme Court's decision in Trump v. Slaughter.
Unlike the FTC statute at issue Monday, the Federal Credit Union Act does not expressly limit the President's authority to remove NCUA board members for cause, a distinction the Trump Administration has repeatedly emphasized.
Legal observers expect the U.S. Court of Appeals for the D.C. Circuit to resume the Harper-Otsuka case, with Monday’s decision likely strengthening the Administration's argument that independent financial regulators exercising executive authority remain subject to presidential control. America's Credit Unions had previously said the Supreme Court's ruling in Slaughter would play a critical role in determining the outcome of the NCUA litigation.
America’s Credit Unions weighed in on the decision.
“The U.S. Supreme Court’s decision provides clarity on the president’s power regarding political appointees on multimember boards at independent agencies,” stated – America’s Credit Unions President/CEO Scott Simpson. “While this ruling will impact the separate legal challenge regarding NCUA board member removals, America’s Credit Unions has consistently advocated for a full, three-person board to ensure stability and effective oversight for the industry. We urge the President to put forward nominees for the two vacant seats and will continue to keep credit unions informed as this ruling is applied to the NCUA Board.”
Brandy Bruyere, partner at Honigman, LLP, shared her perspective with CUToday.info.
“The Supreme Court determined that having a for-cause removal provision for executives appointed to regulatory boards like the FTC, SEC, and NCUA violates the separation of powers in the Constitution,” she said. “Moving forward, the President will be able, at the beginning of a term, to fire and replace these board members.
“One of the biggest complaints over the years about the CFPB being governed by a director rather than a board is how the fluctuations of power in the White House caused the regulatory pendulum to swing,” continued Bruyere. “Now, other agencies will be subject to similar impacts rather than ‘holdovers’ from a prior administration slowing these kinds of shifts, such as when two appointees from the first Trump Administration served until about halfway through the Biden Administration. Overall, this seems to mean more significant fluctuations for the regulatory framework when the presidency shifts to a different political party.”
Defense Credit Union Council Reacts
“Today’s Supreme Court decision provides additional clarity regarding the President’s authority over certain independent federal agencies. As the implications of the ruling continue to be evaluated, DCUC remains focused on ensuring that the National Credit Union Administration remains a strong, effective, and responsive regulator for the credit union system," said DCUC Chief Advocacy Officer Jason Stverak. "Credit unions benefit from consistent leadership and regulatory certainty. A strong NCUA provides the stability and guidance institutions need to plan for the future, innovate responsibly, and continue expanding access to affordable financial services for the members and communities they serve.
"For defense credit unions, that mission is especially important. Our member institutions support active-duty servicemembers, veterans, military families, and the communities that stand behind them. They need a regulatory framework that promotes safety and soundness while allowing credit unions to grow, meet evolving member needs, and strengthen the financial readiness of America’s military community," continued Stverak. "DCUC looks forward to continuing to work with the Administration, Congress, and NCUA leadership to advance policies that provide clarity, reduce unnecessary regulatory burden, and ensure the credit union system remains strong, resilient, and well-positioned to serve millions of Americans for generations to come.”
Originally reported by CU Today.