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Democratic credit union officials sue Trump over firings

By Pete Schroeder

WASHINGTON (Reuters) - A pair of Democratic officials recently fired from a credit union watchdog have sued U.S. President Donald Trump and other senior government officials, alleging that their removal was "patently unlawful."

Todd Harper and Tanya Otsuka filed the suit in the U.S. District Court for the District of Columbia, seeking to be reinstated as board members of the National Credit Union Administration, which oversees the nation's $2.3 trillion credit union sector.

The pair said in their complaint that they were fired without explanation or cause, via brief emails sent by Trent Morse, deputy director of the White House Presidential Personnel Office. Both had several years left on the fixed terms they were supposed to serve at the agency after being confirmed to the roles by Congress.

Spokespeople for the White House and NCUA did not immediately respond to requests for comment. Harper and Otsuka said in separate statements that the firings violate the law, undermine the regulator and hinder its ability to protect the financial system.

"The President’s unprecedented and unlawful decision to terminate two-thirds of the NCUA Board legally serving within their Senate-confirmed terms and without providing any cause should concern everyone who uses a federally insured financial institution like a credit union or a bank," Harper said in his statement.

The lawsuit marks the latest challenge to Trump's efforts to abruptly remove senior officials at agencies Congress had intended to be independent of the president. Two Democrats removed from the Federal Trade Commission filed a similar suit in March, and a parallel fight over removals at the National Labor Relations Board and the Merit Systems Protection Board has risen to the Supreme Court.

The credit union firings from earlier this month have left the regulator, which is supposed to operate as a bipartisan three-member panel, with a sole Republican official, Kyle Hauptman, as its chairman.

The lawsuit alleges that the removals were not only illegal, but also may cripple the agency, since the law requires a quorum of the majority of the board to exert its authorities, including supervising and writing rules for credit unions.