A federal judge has reversed a move by President Donald Trump and ordered the immediate restoration of the National Credit Union Administration's three-person board.

Without warning, Trump in mid-April removed Todd Harper and Tanya Otsuka from the NCUA's board years before their terms were set to expire.

But in a ruling handed down Tuesday, U.S. District Judge Amir Ali stated that, if allowed to stand, Trump's firing of the two board members could set a dangerous precedent.

"The overlap in powers wielded by the NCUA board and the Federal Reserve, and their common role as financial regulators, supports the conclusion that Congress can insulate NCUA board members from at-will removal," Ali wrote.

Harper took to LinkedIn to express his approval of the decision.

"Today's ruling in favor of immediately restoring the board to its full capacity is a real win for the 143 million Americans who rely on the National Credit Union Administration to protect their consumer rights and insure their share deposits. It's also a win for all credit unions by maintaining the agency's future independence," Harper wrote.

Trump first appointed Harper to serve on the NCUA board in 2019. The U.S. Senate confirmed him to serve the remainder of a partial term on March 14, 2019, and he was sworn in as a member of the NCUA board on April 8, 2019. 

After Trump's move to remove the board members, both immediately filed suit to restore the NCUA board to its full composition.

In a lawsuit filed April 28 in United States District Court for the District of Columbia, Harper and Otsuka said their removal was "patently unlawful" and was delivered "without explanation and without any cause."

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Late Tuesday, America's Credit Unions President and CEO Jim Nussle said the national trade group has been consistent in its support of an independent, three-person board at the NCUA.

"And we will know soon whether this matter will be stayed and appealed or if the NCUA will return to business as usual," Nussle said. 

Senator Elizabeth Warren (D-Mass.), the ranking member of the Senate Banking, Housing, and Urban Affairs Committee, said the court's decision to reinstate the "illegally fired" board members is a win for credit unions, consumers and the economy. 

"We will keep fighting to make sure the agency can do its job for the American people — and fighting back against the Trump Administration's lawless actions," Warren said.

Otsuka was sworn in as an NCUA board member in January, 2024. President Joe Biden announced her nomination on Sept. 21, 2023.

NCUA Chairman Kyle Hauptman has been operating as the board's lone member since Harper and Otsuka were fired.

The board has shuttered four credit unions since late April, although some industry observers wonder if those moves will ultimately hold up if challenged in court now that a one-man NCUA board has been ruled unlawful.

District Judge Loren AliKhan last week restored commissioner Becca Kelly Slaughter to her role at the Federal Trade Commission, ruling that Trump's attempt to fire the Democratic appointee in March was illegal.  

The NCUA board is scheduled to meet July 24, but it is unclear if Harper and Otsuka will be present.

"I look forward to once again working with my fellow board members and the outstanding team at the NCUA to ensure our credit union system and our economy remain safe, stable, sound, secure, and fair."

 – Todd Harper
Board Member
NCUA