Ousted NCUA board member Todd Harper warned that President Donald Trump's decision to abruptly fire Tanya Otsuka and himself from the National Credit Union Administration board of directors was a strategic move to erode independence across the federal financial regulatory apparatus.
Speaking to a crowd at the Brookings Institution on Thursday, Harper said the goal may ultimately be to oust members of the Federal Reserve Board.
"I think they're chipping away so that they can get to the Federal Reserve Board," Harper said. "And if you get to the Federal Reserve Board and start removing individuals, that affects monetary policy, and there are great risks to the economy, and [the NCUA, as well as] the Fed were set aside as independent for good reason … so I think they're using us as test cases."
During the conversation, Harper recounted what he saw as the absurdity of the firing process: It took two days for the NCUA to locate the termination notice, which had been sent to the wrong agency email address. To him, it underscored not just carelessness, but the offhandedness with which long-serving regulators can now be dismissed.
Harper reassured credit union customers that insured deposits remain safe and that the agency can still conduct some basic functions. But without a quorum on the board — which is understood to be needed for substantial regulatory action — responses to larger institutional failures or emerging risks are not at full capacity.
"Just yesterday, the agency placed into liquidation a credit union that had gotten into trouble," Harper said. "But if there are credit unions of a larger size, those would require board votes and there's a real question out there — if it requires a board vote, what can happen? There might be some institutions where it's more slowly to get resolved, which could compound a problem over time."
The two ousted board members
Filed in D.C. federal court, the lawsuit argued their firings violated both statutory limits and Supreme Court precedent, leaving the board without a quorum and undermining its ability to oversee $2 trillion in assets across 4,000 credit unions. Harper, a Trump appointee turned Biden-era chair, and Otsuka, the board's first Asian American member, say their dismissals — delivered via identically worded emails — broke with more than 40 years of precedent and politicized a body Congress designed to be insulated from partisan swings.
Harper criticized credit union trade groups for their wait-and-see approach in response to the firings, even as some of the same groups have publicly pushed for establishing a multimember board at the CFPB. Harper said that's likely because they're getting the deregulatory outcomes they prefer.
"They're saying we need to have on one side a multimember board [at] the CFPB," he said. "But now over here at the NCUA, it's just OK that we can run it with one member, because they're getting what they want."
For Harper, the bigger loss isn't just voting power but also institutional knowledge. He warned that stripping independent boards of experienced voices limits the flow of accurate information to Congress and the public. Recalling the Reagan administration's efforts to bury the scale of the savings and loan crisis, Harper said neutering agencies like the NCUA makes it easier for politically appointed budget officials to shape, delay or suppress uncomfortable truths.
"One of the things during the savings and loan crisis that we saw was the Reagan administration did not want to tell Congress the size of the problem and hid it. They had the power — through the Office of Management and Budget — to control what went up to the Hill in testimony," Harper said. "It's one of the reasons why independent regulators like the NCUA … got the ability to send up its testimony without going through an agency-interagency review."
Harper also said the Department of Government Efficiency arrived at the agency the week prior to his firing, though the board had already approved a downsizing plan before DOGE's involvement. Neither he nor Otsuka met with the DOGE team, he said; instead, the Elon Musk-led advisory body met with career staff.
Harper said the firings come as credit unions face heightened scrutiny. He pointed to declining congressional support for their federal tax exemption, with lawmakers recently
The discrepancies between the tax and regulatory treatment of banks and credit unions has been a
Harper also said that despite comprising only 10% of the banking sector, credit unions account for
"Credit unions are in the most perilous place that they've been on a taxation issue in the 25, 26 years that I've worked on credit union policy issues," Harper said. Overdraft and NSF fees are "a huge problem for credit unions, who should be serving people of modest means."
