A group of federal judges has prevented President Donald Trump from dismissing Lisa Cook from her position on the Federal Reserve’s board. This decision came just before Cook and other senior Fed officials were scheduled to meet to decide on potential interest rate cuts.
In the appeals court decision, two out of three judges determined that the Trump administration did not meet the high standards necessary for a stay pending appeal.
A federal judge in Washington had already blocked Cook’s removal on September 9. However, the administration quickly contested this and sought a decision from the court prior to the upcoming Fed meeting, which starts on Tuesday and ends on Wednesday.
Trump initiated the process of removing Cook toward the end of August, based on claims of mortgage fraud presented by one of his political appointees, Bill Pulte, the Director of the Federal Housing Finance Agency. Cook has not been officially accused of any crime and she has countered the allegations.
Cook’s lawyers strongly rebuffed the claims, stating that “Governor Cook has never engaged in mortgage fraud.” NBC News has reviewed related documents, showing Cook listed the property in question as a “vacation home” or “2nd home,” contradicting Pulte’s assertion that it was her primary residence.
In their decision, the appeals court judges affirmed that Cook “may not be removed without being given some form of adequate notice and chance to respond.”
The judges added that “Cook’s role at the Federal Reserve differs in relevant ways” from officials at other agencies.
The Supreme Court recently sought to distinguish the Fed from other attempts by Trump to fire top officials at federal agencies. The high court noted that the Fed is a “uniquely structured, quasi-private entity” that has its own distinct historical tradition.
Under the Federal Reserve Act, the only reason Federal Reserve governors can be removed from their positions is “for cause,” or some type of wrongdoing.
This is a developing story. Please check back for updates.
