(WASHINGTON) — The Supreme Court has blocked for now President Donald Trump’s unprecedented attempt to fire a member of the Federal Reserve Board of Governors, Lisa Cook, over allegation of gross negligence and without any formal opportunity for her to answer the claims.
The decision means Cook, a Democratic appointee who has 10 years left on her 14-year term, will retain her position. She is the first Black woman to serve on the central bank’s advisory committee.
While the Court has recognized expansive power of a president over executive branch agencies, it has appeared to draw a line at the Fed, which has a long history of independence from direct White House interference.
Federal law allows presidents to remove a Fed governor, but only for cause. The heart of Trump’s appeal before the high court involved what constitutes “cause;” who gets to decide that; and, what due process may be owed.
The president had asserted unchecked power, insisting allegations of mortgage fraud against Cook – raised by a member of Trump’s administration, Federal Housing Finance Agency Director Bill Pulte – were sufficient basis alone for her removal.
Trump has claimed Cook illegally filed a mortgage application for a second home as a “primary” residence in an effort to secure more favorable loan terms, at the very least creating an impression of impropriety. The Justice Department has opened a criminal investigation.
Cook, who refused to resign and has not been charge with a crime, insists through her attorneys that relying on “one stray reference” in a 2021 mortgage document amounts to pretext for a politically-motivated effort to manipulate the Fed’s policy board.
The case was being examined by the court in a very preliminary posture, focusing primarily on Trump’s request to stay a lower court order that Cook be allowed to remain on the job as litigation continues. No lower court has thoroughly considered the legal or constitutional issues connected to the dispute.
The court’s decision is widely seen as a victory for the independence of the Federal Reserve – at least in the near term – in the face of Trump’s extraordinary effort to influence the central bank.
This is a developing story. Please check back for updates.
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