A federal appeals court on Monday night rejected President Donald Trump’s emergency request to remove Federal Reserve Governor Lisa Cook. The decision came just hours before a key two day Federal Reserve meeting where officials are expected to decide on interest rates.
In a two to one decision, the US Court of Appeals for the District of Columbia Circuit agreed with a lower court ruling that allows Cook to remain in her position while her legal challenge continues. As a result, Cook will be able to attend the upcoming Federal Reserve meeting unless the Trump administration seeks intervention from the Supreme Court.
Judge Bradley Garcia wrote that approving the government’s emergency request would disrupt the status quo and could lead to repeated removal and reinstatement of Cook during the ongoing litigation. He stated that Cook has a property interest in her position and is therefore entitled to some level of due process before removal. The judge also noted that the Trump administration did not dispute that Cook was given no meaningful notice or opportunity to respond to the allegations against her.
The appeals court ruling supports a decision issued last week by federal judge Jia Cobb, who concluded that Cook had shown strong evidence that her removal likely violated the Federal Reserve Act’s requirement that governors can only be removed for cause.
As the legal case continues, Trump’s economic adviser Stephen Miran is set to join the Federal Reserve Board after the Senate approved his nomination on Monday by a forty eight to forty seven vote along party lines. Democrats raised concerns that his appointment could threaten the independence of the central bank. Senator Elizabeth Warren expressed strong opposition and warned that Miran’s presence could allow the president to exert greater control over the Federal Reserve.
Trump announced his attempt to remove Cook late last month, accusing her of mortgage fraud. He argued that the Federal Reserve Act gives the president authority to remove governors for cause and claimed that sufficient cause existed in Cook’s case. The allegations stemmed from claims by Federal Housing Finance Agency Director Bill Pulte that Cook improperly listed two properties as her primary residence.
Cook challenged the legality of the move and stated that no lawful cause existed for her removal. She said the president lacked the authority to fire her and confirmed that she would not resign and would continue performing her duties as a Federal Reserve governor.
Senator Warren later said that courts continue to reject what she described as Trump’s unlawful attempt to take control of the Federal Reserve. She added that if the courts continue to uphold the law, Cook will retain her seat on the Federal Reserve Board.
