A federal appeals court late on July 25 temporarily paused a lower court ruling preventing President Donald Trump from firing two of the three members of a financial regulator’s board.

The National Credit Union Administration (NCUA) insures deposits at federally insured credit unions.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit granted the government’s emergency motion to stay a July 22 ruling by District Judge Amir Ali of the U.S. District Court for the District of Columbia.

Ali said Trump lacked legal authority to fire Senate-confirmed NCUA board members Todd Harper and Tanya Otsuka in April.

The judge ordered that they be reinstated to their positions, noting that the president may remove them from the agency board before their terms expire “only for cause.”

The circuit court panel said it was putting Ali’s order on hold to give the court time to consider the government’s motion. The panel said its order, known as an administrative stay, “should not be construed in any way as a ruling on the merits of that motion.”

The panel directed Harper and Otsuka to file a response to the government’s motion by Aug. 4.

Harper joined the NCUA board in April 2019 after Trump nominated him. President Joe Biden later nominated him for a term to expire in April 2027. Otsuka joined the board in January 2024 for a term to end in August 2029. She was nominated by Biden.

That left in place only one board member, Kyle Hauptman. He joined the board in December 2020 after Trump nominated him. Trump designated him as chairman on Jan. 20 of this year.

In April 2025, the White House informed Harper and Otsuka that they had been fired from their positions, effective immediately. No reason was given.

Harper and Otsuka sued, claiming that the terminations were unlawful.

Ali described the NCUA in his ruling as an “independent agency that functions much like the Federal Reserve and Federal Deposit Insurance Corporation.”

Ali said Congress passed a law in 1978 that provided that the board’s three members would serve staggered six-year terms and that no more than two members could be affiliated with the same political party.

The judge noted that the government argued that the president “maintains absolute authority to remove NCUA Board members at will.”

However, in passing the 1978 law, “Congress restricted the President’s authority to fire NCUA Board members,” the judge said.

To accept the Trump administration’s position would mean that the president was free to fire Federal Reserve Chairman Jerome Powell without cause, Ali said.

“The overlap in powers wielded by the NCUA Board and the Federal Reserve, and their common role as financial regulators, supports the conclusion that Congress can insulate NCUA Board members from at-will removal,” the judge said.

The Federal Reserve Act states that members of its board of governors, including its chairman, may be fired by the president before their terms expire only “for cause.”

Despite that legal provision, Trump has repeatedly threatened to fire Powell.

On July 15, Treasury Secretary Scott Bessent said a “formal process” is underway to find a successor for Powell, whose term expires in May 2026. Bessent said that despite Trump’s criticism of Powell’s job performance, he does not intend to fire him before his term runs out.

Ali said that in passing the 1978 law, Congress did not violate the separation of powers “because the NCUA Board fits comfortably within the traditional model of a multimember expert agency that does not wield substantial executive power.”

The separation of powers is a constitutional doctrine that divides the government into three branches to prevent any single branch from accumulating too much power.

Since his second term began in January, Trump has been issuing orders to remove personnel from independent federal agencies such as the NCUA, whose appointees traditionally have been shielded from termination without cause.

Tom Ozimek contributed to this report.

This article by Matthew Vadum appeared July 26, 2025, in The Epoch Times. It was updated July 27, 2025.