The two Democratic NCUA board members ousted by President Trump have filed suit, arguing that their firings violated federal law.

Todd Harper and Tanya Otsuka filed suit in the U.S. District Court for the District of Columbia, naming President Donald Trump, Treasury Secretary Scott Bessent, NCUA Chairman Kyle Hauptman and others as defendants. They contend that they only could be fired for cause. “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,” the two state.

They go on to assert that their terminations disregard the protections that Congress established to preserve the board’s independence and they ask to be reinstated as members of the board.

The two NCUA board members are the latest Democratic commission and board members to file suit over their firings by Trump. Others include Democratic members of the FTC, the Equal Employment Opportunity Commission, the National Labor Relations Board and the Merit Systems Protection Board.

Harper and Otsuka contend that the NCUA board cannot continue to operate with only one member. The only current board member is Republican Kyle Hauptman, who was designated as Chairman by President Trump.

“With only a single Member purporting to exercise authority, the NCUA cannot continue carrying out the supervisory, regulatory, and institutional functions that Congress intended to be exercised by a Board composed of at least a majority of its Members,” they argue. The Federal Credit Union Act provides that the “Board shall consist of three members” and that a “majority of the Board shall constitute a quorum.”

Before the suit was filed, the NCUA issued a statement asserting that the agency can operate as it normally does even if the board only has one member.

“Please be assured that the NCUA has precedent and standing delegations of authority in place to continue performing all operational and statutory requirements under the authority of a single Board Member,” the agency said, in a statement, following the firings.

During the George W. Bush administration, Dennis Dollar, who was chairman of the NCUA board, held a board meeting, voted and took several administrative and operational actions, after two members left the board, the agency said.

“The records are in place at NCUA from 2002 that clearly establish the precedent that the Chairman can act as the Board,” the NCUA said.

The agency continued, “It is the NCUA’s long-held view that a single Board Member constitutes a quorum when there are no other Board Members. Chairman  Hauptman and NCUA’s leadership are equipped with the required authorities to continue implementing the Administration’s priorities and fulfilling our mission of protecting the system of cooperative credit and its member-owners through effective chartering, supervision, regulation, and insurance.”

The NCUA board, with Hauptman as the only member, is scheduled to meet on May 22 to receive a briefing on the agency’s Voluntary Separation Program and the agency’s Share Insurance Fund.

“All of us at NCUA are working together to build a more streamlined agency focused on executing our core mission of protecting the safety and soundness of the credit union system,” Hauptman said, following the ouster of the two board members. “Stakeholders can rest assured that NCUA is continuing to do the job that Congress demands of us and the American people expect.”

The remainder of the board meetings through the end of the year are marked “tentative.”

In a statement to CU Today, Dollar said that he attempted to set a precedent for board operations with a single member in early 2002.

“I took several actions while serving as chairman of the one-person NCUA board to establish a precedent that – if this ever happened again – the agency would not be stymied in doing its job and could function with a one-member board until the three-member board was reestablished with future appointments,” Dollar said.

Dollar said the only thing he did not do as a one-member board was to approve a regulation. He said he was certain that the NCUA Chairman could approve or rescind a regulation if necessary. However, he said the agency did not have anything pending that needed quick approval, so he decided to wait until a full board was sworn in. “I chose not to set the precedent of approving a regulation—although all indications at the time were that I had the authority to do so,” he added.

The agency already has taken at least one action. The NCUA published a Federal Register notice stating that it is soliciting comment on its final rules dealing with the simplification of share insurance and succession planning.

The NCUA took the action, citing a January 20 White House memorandum that called for a regulatory freeze pending a review of rules. The memorandum, among other instructions, directs federal agencies to “consider opening a comment period to allow interested parties to provide comments about issues of fact, law, and policy raised by the rules” for rules that have not yet taken effect.

The share insurance simplification rule takes full effect on December 1, 2026 and the succession planning regulation takes full effect on January 1, 2026.