WASHINGTON—A lawsuit has been filed against the Trump Administration over the dismissals of former NCUA board members Todd Harper and Tanya Otsuka.
The lawsuit was filed Monday morning in United States District Court for the District of Columbia by attorney Vincent Levy of Holwell Shuster & Goldberg LLP, on behalf of the former board members. It seeks to overturn their dismissals and restore Harper and Otsuka to their Senate-confirmed positions.
Listed as defendants are: President Donald Trump, NCUA Board Chairman Kyle Hauptman, Treasury Secretary Scott Bessent, NCUA Executive Director Larry Fazio, and Deputy Assistant to the President and Deputy Director of the White House Presidential Personnel Office Trent Morse.
The suit terms the removal of Harper and Otsuka as “patently unlawful.”
“The President terminated the terms of Plaintiffs Todd M. Harper and Tanya F. Otsuka in the middle of their fixed terms as members of the board of the NCUA, without explanation and without any cause. That termination disregards the protections Congress established to preserve the board’s independence and threatens the integrity of a vital federal financial regulator,” the lawsuit explains.
The suit states that during the NCUA board’s “nearly fifty years of existence, the President has never removed a member whose term had not yet expired. President Trump’s unprecedented removal of Mr. Harper and Ms. Otsuka violates Congress’s mandate and has left the board without a quorum. Plaintiffs seek declaratory and injunctive relief to restore the board’s lawful composition and preserve the independence Congress mandated.”
Harper, Otsuka Respond
Harper addressed the suit in a statement.
“Having grown up in a neighborhood next to Chicago’s industrial East Side, I learned early on that when someone begins a fight, you stand up and push back for what’s right,” he said. “What’s right is protecting consumers and their deposits by maintaining an independent, three-member NCUA Board guided by expert judgement in line with the Federal Credit Union Act’s mandates and other statutory requirements.”
“That’s why I joined my fellow NCUA Board Member, Tanya Otsuka, in filing this important legal proceeding against the Trump Administration. The President’s unprecedented and unlawful decision to terminate two-thirds of the NCUA board legally serving within their Senate-confirmed terms and without providing any cause should concern everyone who uses a federally insured financial institution like a credit union or a bank.”
“Credit union members need a strong, independent watchdog,” continued Harper. “That’s why we’re seeking relief to restore the board’s lawful composition and preserve the independence Congress mandated. Our failure to take these actions could pave the way to the consolidated regulation of credit unions and banks and lead to the demise of our nation’s vibrant credit union movement focused on its mission of meeting the credit and savings needs of members, especially those of modest means.”
Otsuka, in a statement, emphasized the U.S. banking system is built on trust.
“People need to be confident that their hard-earned money will be there when they need it. When people lose that sense of trust, it can reverberate across the financial system and lead to financial crises that end up costing people their homes, jobs, and financial security,” she said.
“The National Credit Union Administration plays a key role in maintaining trust in the financial system,” continued Otsuka. “The NCUA protects Americans’ deposits in credit unions, just like the FDIC protects deposits in banks. We watch out for the 142 million people and businesses that use a credit union for a checking or savings account, a credit card, or a car loan. Credit unions are nonprofit financial institutions created to help all communities access the financial system.”
Brief Email
The lawsuit asserts there was no cause for the termination of Harper and Otsuka, pointing to brief email messages from Morse to the board members.
“On April 15, 2025, at 7:01 pm, one minute after sending an email to Mr. Harper, Mr. Morse sent Plaintiff Tanya F. Otsuka an identically worded email, likewise purporting to terminate her position as a Member of the NCUA Board, “effectively immediately.” Again, the email stated only: ‘On behalf of President Donald J. Trump, I am writing to inform you that your position on the National Credit Union Administration is terminated, effective immediately. Thank you for your service.
“The identical, one-sentence emails sent to both Mr. Harper and Ms. Otsuka at the same time on the same day say nothing about the reasons for the termination, and do not attempt to assert a basis for cause. Nor could they,” the suit claims.
ACU Offers Perspective
America's Credit Unions said it is closely reviewing the lawsuit filed by Harper and Otsuka."Our position remains firm in that credit unions' federal regulator should be an independent, bipartisan board," said America's Credit Unions' President and CEO Jim Nussle. "As the Administration has yet to propose nominations to fill the two current vacancies, we continue to engage the NCUA to gain further insights as to what initiatives or actions Chairman Hauptman will take as a one-member board. Recently, we have seen similar legal challenges across various federal agencies that have experienced similar dismissals. We will continue to act in the best interest of our member credit unions and their 142 million members."Click here for the lawsuit.