Appeals Court Blocks Trump Management’s Attempt to Fire Federal Reserve Governor Lisa Cook
A federal appeals court has ruled that Federal Reserve Governor Lisa Cook can continue to serve, blocking the Trump administration’s attempt to remove her from office. The ruling centers on accusations of mortgage fraud leveled against Cook prior to her appointment,allegations she denies. A potential emergency appeal to the Supreme Court is anticipated, with Cook expected to be involved.
The court’s decision signals a potential strengthening of judicial oversight regarding a president’s ability to dismiss Federal Reserve officials. Advocates for central bank independence view the case as a significant test of the principle that presidents shoudl not be able to replace Fed leaders based on policy disagreements or unsubstantiated claims.
Judge Bradley Garcia, of the U.S. Circuit Court of Appeals, authored a concurring opinion alongside fellow Biden-appointed Judge Michelle Childs, stating Cook was likely to prevail in the case. Garcia highlighted that Cook possesses a “property interest” in her position adn is therefore entitled to “some kind” of due process before being removed. He noted the government did not dispute providing Cook with no meaningful chance to respond to the accusations. “Even accepting that [Cook] would not succeed in securing a different outcome,” Garcia wrote, “Cook’s entitlement to process stands apart.”
Judge Gregory Katsas dissented,arguing the District Court judge was ”mistaken” in determining Cook has a constitutionally protected property interest in her office.
The dispute arose after former President Trump announced Cook’s firing in late August, based on accusations from his housing chief, Bill Pulte, alleging Cook committed mortgage fraud. Pulte referred the matter to the Justice Department for criminal prosecution, but the allegations have not been litigated in any court. Reuters reported Friday that documents from Cook’s credit union identified one of the properties in question, a condo in Atlanta, as a vacation residence.
Cook’s current term is scheduled to expire in 2038. The core of the legal battle revolves around the interpretation of the Federal Reserve Act, which allows a president to remove a Fed governor “for cause.” Trump administration lawyers contend the president has broad authority to determine what constitutes “cause.” cook’s legal team argues that allowing the president sole discretion on “cause” would effectively remove any limits on the ability to fire central bank officials, contradicting the intent of the Federal Reserve Act.
