WASHINGTON (AP) — The Trump administration on Thursday requested an emergency order from the Supreme Court to remove Lisa Cook from the Federal Reserve’s board of governors.
The administration’s appeal follows a federal appeals court’s decision to deny the request to oust Cook, a move that is part of former President Donald Trump’s strategy to influence the Fed’s seven-member governing board and challenge its independence. Historically, no president has removed a sitting Fed governor in the agency’s 112-year existence.
Cook, appointed by current President Joe Biden, has resisted calls to resign, stating she will not be “bullied” by Trump. Her attorney, Abbe Lowell, emphasized her commitment to her role, affirming that she will continue to fulfill her duties as a Senate-confirmed Board Governor.
In a separate matter, Senate Republicans confirmed Stephen Miran as Trump’s nominee for an open position on the Fed’s board.
Trump attempted to terminate Cook on August 25, but a federal judge ruled last week that such a removal would likely be illegal and reinstated her to the board. The former president has accused Cook of mortgage fraud, asserting that she improperly claimed two properties in Michigan and Georgia as “primary residences” in July 2021 before her confirmation to the board. Such claims can significantly impact mortgage rates and down payments.
Cook has denied any allegations of wrongdoing and is not facing any criminal charges. Documents reviewed by The Associated Press indicate that Cook had identified her Atlanta condo as a “vacation home” in a May 2021 loan estimate, and noted it as a “2nd home” in a security clearance form. These details seem to weaken the administration’s allegations of fraud.
U.S. District Judge Jia Cobb ruled that the Trump administration did not meet the legal criteria that permit the removal of Federal Reserve governors only “for cause,” which largely pertains to misconduct during their tenure. Since Cook did not join the board until 2022, this ruling favored her.
Cobb also indicated that the proposed firing would violate Cook’s due process rights, preventing her from contesting the dismissal. A federal appeals court panel in Washington upheld this decision by a 2-1 vote, rejecting the administration’s efforts to proceed with Cook’s firing.
Trump’s legal team contended that even if the alleged conduct occurred before Cook’s tenure, it raises significant questions about her trustworthiness and ability to responsibly manage interest rates and the economy.
Historically, Trump has successfully obtained court orders to dismiss heads of other independent federal agencies, such as the National Labor Relations Board and the Federal Trade Commission, although legal disputes remain ongoing. However, the Supreme Court has differentiated the Federal Reserve from these agencies, indicating that Trump cannot remove Fed governors without cause.
For further coverage of the Federal Reserve System, visit https://apnews.com/hub/federal-reserve-system.
