President Trump Asks Supreme Court To Approve Removal Of Federal Reserve Governor Lisa Cook
President Trump Asks Supreme Court To Approve Removal Of Federal Reserve Governor Lisa Cook
Cobb ruled that Trump’s allegations of mortgage fraud against Cook, which Cook has denied, likely did not amount to sufficient legal grounds for removal under the 1913 law establishing the Federal Reserve.
President Donald Trump’s administration has asked the U.S. Supreme Court to approve his move to fire Federal Reserve Governor Lisa Cook over the allegations of mortgage fraud.
Trump made the request on Thursday in a move that would be without precedent in the central bank’s 112-year history and which critics warn could undermine the Fed’s independence.
The Justice Department urged the justices to lift a September 9 order by U.S. District Judge Jia Cobb that temporarily blocked Trump from removing Cook, an appointee of former Democratic President Joe Biden.
Cobb ruled that Trump’s allegations of mortgage fraud against Cook, which Cook has denied, likely did not amount to sufficient legal grounds for removal under the 1913 law establishing the Federal Reserve.
“This application involves yet another case of improper judicial interference with the President’s removal authority, here, interference with the President’s authority to remove members of the Federal Reserve Board of Governors for cause,” the Justice Department wrote in its filing.
Under the U.S. Federal Reserve Act, governors may only be removed “for cause.”
No president has ever dismissed a Fed governor, and the law’s removal provisions have never been tested in court.
Congress deliberately created this protection to shield the central bank from political pressure in monetary policy.
Cook, the first Black woman to serve on the Fed’s Board, participated this week in a two-day policy meeting where officials cut interest rates by a quarter of a percentage point, citing weakness in the job market.
She voted in favour of the cut announced Wednesday.
The Fed declined to comment on the litigation but has previously said it would abide by court decisions while Cook remains in her position.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit earlier this week denied the administration’s request to overturn Judge Cobb’s order.
In a 2–1 decision, the panel sided with Cook, ruling she likely had been denied due process under the Fifth Amendment.
“Before this court, the government does not dispute that it provided Cook no meaningful notice or opportunity to respond to the allegations against her,” wrote Judge Bradley Garcia, joined by Judge J. Michelle Childs, both Biden appointees.
But Trump-appointed Judge Gregory Katsas dissented.
Trump announced in August that he would remove Cook, citing allegations that she misrepresented details on mortgage applications prior to joining the Fed in 2022.
Trump and William Pulte, his appointee to lead the Federal Housing Finance Agency, have alleged that Cook inaccurately described properties on three mortgage applications to secure lower rates and tax benefits.
“Put simply, the President may reasonably determine that interest rates paid by the American people should not be set by a Governor who appears to have lied about facts material to the interest rates she secured for herself, and refuses to explain the apparent misrepresentations,” the Justice Department reportedly wrote on Thursday.
Cook has rejected the accusations and argued that Trump’s attempt to oust her is politically motivated, driven by her monetary policy stance.
She has sued to block her removal, contending that the law only allows dismissal for misconduct committed while in office.
A loan estimate reviewed by Reuters appears to show that Cook declared an Atlanta home as a “vacation home,” a detail that could undercut the allegations.
In Ann Arbor, Michigan, local tax officials said she had not broken any property tax rules.
But the Justice Department’s filing made no mention of those findings.
Trump has long criticized the Fed, demanding steep interest rate cuts and repeatedly berating Fed Chair Jerome Powell, whom he has called a “numbskull,” “incompetent” and a “stubborn moron.”
Concerns about Trump’s attempt to remove Cook have sparked alarm among economists and lawmakers, who warn that if the Supreme Court sides with the administration, it could erode the Fed’s ability to make decisions free from political interference, a cornerstone of its role in managing inflation and stabilizing the economy.
The Supreme Court, with its 6–3 conservative majority, has consistently supported Trump’s claims of executive authority since his return to office in January.
