US judge rules Trump illegally fired two Democratic members of credit union agency

By Mike Scarcella

July 22 (Reuters) - A federal judge on Tuesday ordered the reinstatement of two Democratic members of the National Credit Union Administration, saying President Donald Trump’s administration illegally fired them without justification.

U.S. District Judge Amir Ali in Washington said in his ruling that the administration violated removal restrictions established by the U.S. Congress when it fired NCUA board members Todd Harper and Tanya Otsuka in April.

The firings left only one board member, Republican Chairman Kyle Hauptman, to oversee operations. The NCUA supervises the nation's $2.3 trillion credit union sector.

The White House and Justice did not immediately respond to requests for comment.

Vincent Levy, a lawyer for Harper and Otsuka, in a statement said the judge's ruling “vindicates Congress’s judgment that the independence of financial regulators like the NCUA Board is necessary to ensure the stability of our financial markets.”

Trump appointed Harper in 2019 during his first term, and Democratic President Joe Biden in 2021 named him the board’s chairman. Harper’s term was not due to expire until 2027. Otsuka was nominated by Biden and confirmed in 2023. Her term was not set to expire until 2029.

They said in their lawsuit that no U.S. president had removed a board member prior to the expiration of their term in the history of the NCUA's nearly 50-year existence.

The Trump administration in its defense asserted that the president has absolute authority to remove credit union board members at will.

The Justice Department has made similar arguments in other lawsuits challenging Trump’s removal of members of independent federal agencies.

On Monday, a federal appeals court panel in Washington temporarily blocked a judge’s order that would allow fired Democratic Federal Trade Commissioner Rebecca Slaughter to return to her post while the administration appeals a judge’s reinstatement decision.

The U.S. Supreme Court in May ruled that Trump could bar two Democratic members of federal labor boards from their posts while they challenge the legality of their dismissals.