DOJ Challenges Reinstatement of Fired NCUA Board Members
On Friday, the Justice Department claimed that two dismissed National Credit Union Administration board members had relied on legislative history, statutes that are no longer in force, and the mood of the 1970s to persuade a district court to restore them to their positions. In its request that the D.C. Circuit Court of Appeals overturn that reinstatement, the DOJ went back well before the 1970s, citing James Madison, Alexander Hamilton, and a 1903 Supreme Court decision.[S1]
The DOJ cited Shurtleff v. U.S. for the rule that, unless a constitutional or statutory provision expressly says otherwise, the president may remove an officer through his general appointment power, even when the Senate confirmed that officer. Where no statute limits removal, the DOJ maintained, it is beyond question that the president, as the appointing authority, can dismiss NCUA board members at will.[S1]
Background: Firings, Lawsuit, and Reinstatement
In April 2025, President Donald Trump removed Todd Harper and Tanya Otsuka, two Democrats on the NCUA board. Harper and Otsuka filed suit against Trump, saying their dismissals left only one board member, short of the number needed for a quorum. A district judge put them back in their posts in July of that year. Legal observers have since concentrated on Supreme Court decisions about Trump's efforts to fire Federal Trade Commission members, which were permitted, and a Federal Reserve governor, which was not.[S1]
In a July filing with the appeals court, Harper and Otsuka maintained that the NCUA was patterned on the Fed, which gives it the same independence as the central bank and shields board members from removal by the president at will. On Friday, the DOJ dismissed that comparison, writing that although the plaintiffs liken themselves to the Federal Reserve Board of Governors, the comparison collapses on its own terms because Congress expressly created statutory protections for the Federal Reserve but not for the NCUA. In any event, the DOJ wrote, the NCUA is not the Federal Reserve.[S1]
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DOJ's Legal Arguments and the Cook Precedent
The DOJ said Harper and Otsuka contend that Congress should be treated as having implicitly imposed removal protections on the board without ever passing any such law. According to the DOJ, the plaintiffs have the argument exactly reversed. Although the DOJ may disagree with the Supreme Court's ruling that spared Fed Gov. Lisa Cook from Trump's attempt to fire her at will, on Friday it pointed to that case as an exception to the general rule.[S1]
The DOJ wrote that the unique tradition of protecting Fed board members does not reach every federal financial regulator. It observed that the Secretary of the Treasury lacks political insulation from the president even though the secretary's choices about Treasury securities can influence interest rates or how monetary policy is carried out. The same is true of the Office of the Comptroller of the Currency. The DOJ invoked Madison, who mentioned the comptroller of the currency when he wrote that strong reasons may exist why such an officer should not serve at the executive branch's pleasure. Citing Madison again, the DOJ wrote that the Constitution requires these executive officers to depend on the president because he can remove them.[S1]
The DOJ contended that the district court should not have reinstated Harper and Otsuka. According to the DOJ, the Cook decision showed that courts of equity would not step in through injunctions. Rather, a court's equitable authority was confined to orders permitting an officer to serve de facto while a legal action determined their title. In other words, a court of equity could grant injunctive relief letting a plaintiff stay in office while litigation continued, but it could not conclusively decide whether the plaintiff had been validly removed.[S1]
