Trump Seeks Supreme Court Order to Dismiss Fed Governor Cook

The Trump administration has requested an emergency order from the U.S. Supreme Court to remove Lisa Cook from her position on the U.S. Federal Reserve board of governors. This action follows a previous ruling from an appeals court that denied the administration’s effort to oust Cook, highlighting a significant clash between the executive branch and the independence of the Fed.

This unprecedented move to reshape the seven-member governing board of the Federal Reserve is particularly noteworthy, as no president has successfully fired a sitting Fed governor in the agency’s 112-year history. Cook, who was appointed by President Joe Biden, has publicly stated her intention to remain in her role, asserting that she will not be “bullied” by Trump. Her attorney, Abbe Lowell, emphasized that Cook “will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”

In a separate development, Senate Republicans confirmed Stephen Miran as Trump’s nominee for an open position on the Fed board. Both Cook and Miran participated in a recent vote where the Federal Reserve decided to lower its key interest rate by a quarter-point.

Strong allegations have emerged from Trump, who seeks to remove Cook, claiming she engaged in mortgage fraud by designating two properties in Michigan and Georgia as “primary residences.” Such classifications could potentially allow for lower mortgage rates. In his filing, U.S. Solicitor General D. John Sauer argued that it is reasonable for the President to question whether someone who appears to have misrepresented facts should influence interest rates.

Cook has countered these allegations, asserting that she has not committed any wrongdoing and has not faced criminal charges. Documents reviewed by the Associated Press suggest Cook had previously indicated her Atlanta condo as a “vacation home,” which contradicts the Trump administration’s claims of fraud.

On August 25, 2023, Trump initially sought to terminate Cook’s position. However, U.S. District Judge Jia Cobb ruled that the administration did not meet the legal requirement for firing a Fed governor, which mandates cause pertaining to misconduct while in office. Notably, Cook did not join the Fed board until 2022, a factor considered by Judge Cobb in her ruling.

In a 2-1 decision, a federal appeals court in Washington upheld Judge Cobb’s ruling, rejecting the administration’s request to proceed with Cook’s removal. Trump’s legal team contends that even if the alleged misconduct occurred before her tenure as a governor, it raises questions about Cook’s integrity and ability to manage interest rates responsibly.

Previous rulings from the Supreme Court have allowed Trump to terminate leaders from other independent federal agencies, such as the National Labor Relations Board and the Federal Trade Commission, with minimal cause. However, the Supreme Court has differentiated the Federal Reserve from these agencies, indicating that the President may not have the authority to act against Fed governors without just cause.

In its latest filing to the Supreme Court, the Trump administration seeks a temporary order from Chief Justice John Roberts to effectively remove Cook from her position while requesting a more permanent solution as her legal case unfolds. This situation underscores the ongoing tension between political leadership and the independent operation of regulatory bodies in the United States.