Power, Politics, and the NCUA: Unpacking Trump’s Latest Move
President Donald Trump’s recent dismissal of the two Democratic members of the National Credit Union Administration (NCUA) Board—Todd Harper and Tanya Otsuka—has ignited significant controversy and raised concerns about the independence of federal regulatory agencies. This move leaves the NCUA, the federal agency overseeing the $2.3 trillion U.S. credit union sector, with only one board member, Republican Chairman Kyle Hauptman
The Firings and Their Immediate Impact
Todd Harper, initially appointed by Trump in 2019 and later reappointed by President Biden as chairman, was serving a term set to expire in 2027. Tanya Otsuka, nominated by Biden and confirmed in 2023, had a term ending in 2029 . Their abrupt removal has effectively paralyzed the NCUA’s policymaking capabilities, as the agency now lacks the quorum necessary to enact new regulations or enforcement
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Harper criticized the action as politically motivated and a threat to democratic norms, stating that it “violates the bipartisan statutory framework adopted by Congress to protect credit union members and their deposits.” Otsuka echoed these concerns, emphasizing that the NCUA’s independence is critical to maintaining confidence and stability in the financial system .
Broader Implications for Regulatory Independence
This development is part of a broader pattern in which President Trump has sought to assert greater control over independent regulatory bodies. Similar actions have been taken with the Federal Trade Commission and federal labor boards . Experts warn that such moves could undermine the checks and balances designed to prevent political interference in financial regulation.
The firings have also sparked concerns about the potential for increased political influence over the Federal Reserve. Treasury Secretary Scott Bessent mentioned that the Trump administration is considering replacements for current Fed Chair Jerome Powell, whose term ends in May 2026
Reactions from the Financial Community
The financial community has expressed alarm over the potential erosion of regulatory independence. Dennis Dollar, former chairman of the NCUA, described the removals as “uncharted territory” and indicative of a broader strategy to reshape federal regulatory agencies . Michael Emancipator, senior regulatory counsel at the Independent Community Bankers of America, questioned who would oversee the expanding activities of credit unions in the absence of a fully functioning NCUA board .
Conclusion
The dismissal of Harper and Otsuka from the NCUA Board represents a significant shift in the relationship between the executive branch and independent regulatory agencies. As the NCUA grapples with the immediate consequences of these actions, including canceled board meetings and staff disruptions, the broader implications for financial regulation and the principle of agency independence remain a pressing concern.
