The Trump Administration’s Effort to Remove Lisa Cook from the Federal Reserve
The Trump administration has asked the Supreme Court for an emergency order to remove Lisa Cook from the Federal Reserve’s board of governors. This move comes after an appeals court refused to go along with ousting Cook, who was appointed to the Fed’s board by President Joe Biden, a Democrat.
The White House campaign to unseat Cook marks an unprecedented bid to reshape the Fed board, which was designed to be largely independent from day-to-day politics. No president has fired a sitting Fed governor in the agency’s 112-year history. Cook has said she won’t leave her post and won’t be “bullied” by Trump, and one of her lawyers, Abbe Lowell, has said she “will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”
The Background of the Case
Trump sought to fire Cook on Aug. 25, but a federal judge ruled last week that the removal probably was illegal and reinstated her to the Fed’s board. Trump has accused Cook of mortgage fraud because she appeared to claim two properties, in Michigan and Georgia, as “primary residences” in June and July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them were declared as a rental property or second home.
However, Cook has denied any wrongdoing and has not been charged with a crime. According to documents obtained by The Associated Press, Cook did specify that her Atlanta condo would be a “vacation home,” according to a loan estimate she obtained in May 2021. And in a form seeking a security clearance, she described it as a “2nd home.” Both documents appear to undercut the Trump administration’s accusations of fraud.
The Legal Battle
U.S. District Judge Jia Cobb ruled that the administration had not satisfied a legal requirement that Fed governors can only be fired “for cause,” which she said was limited to misconduct while in office. Cook did not join the Fed’s board until 2022. Cobb also held that Trump’s firing would have deprived Cook of her due process, or legal right, to contest the firing.
By a 2-1 vote, a panel of the federal appeals court in Washington rejected the administration’s request to let Cook’s firing proceed. Trump’s lawyers have argued that even if the conduct occurred before her time as governor, her alleged action “indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy.”
Related Developments
Separately, Senate Republicans on Monday confirmed Stephen Miran, Trump’s nominee to an open spot on the Fed’s board. Both Cook and Miran took part in Wednesday’s vote in which the Fed cut its key interest rate by a quarter-point.
Related
Trump has previously won orders from the court’s conservative majority to fire the presidentially appointed leaders of other independent federal agencies, including the National Labor Relations Board and the Federal Trade Commission, even as legal fights continue.
The Supreme Court’s Involvement
In its new filing to the Supreme Court, the administration is asking Chief Justice John Roberts for a temporary order that would effectively remove Cook from the board and a more lasting order from the whole court that would be in place while her legal case continues.
Solicitor General D. John Sauer urged the Supreme Court to decide in a week’s time whether to hear the case and hold arguments the first week of November.
Other News
The First Amendment protects offensive expression, too.
The bill passed in the House on Thursday and could receive a final vote in the Republican-dominated state Senate next week.
