On 15/9, a three-judge panel of the federal appeals court in Washington ruled on former President Donald Trump's decision to dismiss Governor Lisa Cook, one of the seven members of the Federal Reserve Board of Governors.
In their ruling, Judges Bradley Garcia and Michelle Childs stated that Cook was entitled to due process before being dismissed by the Trump administration, thereby upholding the lower court's decision and compelling the administration to reinstate her.
"Because Ms. Cook has a legally protected interest in her position, she is entitled to some process before being removed. The administration provided no notice or opportunity for Ms. Cook to respond. Whatever the ultimate outcome, the right to due process is undeniable," Judge Garcia wrote.
Trump announced Cook's dismissal in August, citing allegations of mortgage fraud raised by Federal Housing Finance Agency Director Bill Pulte. Pulte claimed Cook made inconsistent declarations about her residency on mortgage applications in Michigan and Georgia in 2021.
However, Cook denied the allegations, arguing that any discrepancies were personal matters predating her tenure at the Fed. She subsequently challenged the dismissal in federal court.
 |
Lisa Cook is sworn in as a Federal Reserve governor in May 2022. Photo: AFP |
Lisa Cook is sworn in as a Federal Reserve governor in May 2022. Photo: AFP
On 9/9, the federal district court in Washington concluded that Cook's dismissal might violate the Federal Reserve Act. This law only permits the president to remove a Fed governor "for cause," generally understood to mean misconduct during their term.
Trump's accusations, however, pertained to Cook's mortgage documents from before her appointment, making them an illegitimate basis for dismissal. In August, Reuters accessed loan documents in Atlanta showing Cook declared the property there as a "second home" in May 2021, consistent with her defense.
Meanwhile, Justice Department lawyers argued that the president's authority to remove governors could be interpreted more broadly and that the alleged inconsistencies in Cook's financial records constituted "cause."
The Justice Department emphasized that Trump's decision to dismiss Cook was intended to "protect the integrity of the Fed" and ensure its stability. They also argued that the court lacked jurisdiction to review the president's decision regarding Fed governors.
With the appeals court's ruling, Cook can participate in this week's Federal Reserve Board interest rate policy meeting. The White House is likely to appeal the case to the Supreme Court.
If the Supreme Court upholds Cook's dismissal, Trump would have the opportunity to nominate a new governor, potentially giving his policy supporters a majority on the Federal Reserve Board.
Thanh Danh (CBS, Reuters)
