The recent movement at the National Credit Union Administration (NCUA) has been series of Uno Reverse plays that no one has had on their 2025 bingo card. Between the reinstatement and the stay, it’s been difficult to stay apprised of everything that has occurred.
As you may recall, in April, the Trump Administration removed both former NCUA Chair Todd Harper and Board Member Tanya Otsuka from their posts despite neither of their terms being completed. The move was considered a surprise to the industry, particularly as former NCUA Chair Todd Harper was appointed to serve on the NCUA’s board by President Trump during his first term in the White House.
Predictably, both former Chair Harper and Board Member Otsuka filed suit asking the court to reinstate them as board members. According to the claims made in the original complaint, both board members stated that their termination was unlawful and, that in the 50 years of the existence of the NCUA Board, no sitting president has ever removed a board member prior to their term being completed.
From an industry perspective, the common sentiment seemed to be that the removal of both board members would be permanent and that the court would uphold the Trump Administration’s decision. The reinstatement of any official across any government agency is rare and it was not predictable that the court would reinstate the terms.
Then, in the first Uno Reverse play, the U.S. District Court for the District of Columbia issued a memorandum opinion which reinstates both board members. Ba-Zinga. The court, in sum, rested its decision on the premise that both board members are insulated from at-will removal because Congress created that provision, which means both board members are entitled to relief as a matter of law. In a sentence, in the court’s opinion, the Trump Administration wrongfully terminated both board members and as a result, both members are to be reinstated to their former positions.
But, as anyone who has played a competitive game of Uno knows, the most obvious play after an Uno Reverse card is another Uno Reverse card, which is exactly what happened. The day after the memorandum opinion was published by the district court, the government filed an appeal of the decision, asking the appeals court for a stay. The appeals court granted the government’s request and, as a result, stayed the reinstatement of both board members. The stay means that both board members’ reinstatement is paused until the court of appeals has had the opportunity to review the case.
To be clear, the issuing of a stay is a standard legal recourse both to request and for the court of appeals to grant. Generally speaking, there may be items that the court will consider which ultimately affect the outcome of the case and the stay allows those things to be considered without the concern of ongoing harm. While the “harm” here is nonexistent, court procedure must stay consistent, regardless of the perceived implications.
The reason these types of changes matter to the credit union industry is because the makeup of the NCUA board may directly affect how it operates. The NCUA was created on a bipartisan framework with the intent for that framework to represent all credit unions and their members. Allowing a one-member board to exist not only creates the potential for some awkward monologues, but also could lead to less holistic results, potentially markedly changing the industry.
Will the court of appeals make an Uno play of their own? The industry will need to wait as the court of appeals considers its hand to determine which play will be made. For the moment, credit unions should maintain consistent operations and stay apprised of the changes at the NCUA.
Have questions or want to know more? Contact ViClarity’s Compliance Services team at compliancesupport@viclarityus.com.
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