A federal judge on Tuesday issued a temporary restraining order preventing President Donald Trump from removing Federal Reserve governor Lisa Cook for the time being.
This decision allows Cook to remain on the central bank’s board until the case is fully examined. She is permitted to continue her duties during this period.
U.S. District Judge Jia Cobb stated that the court would issue an injunction directing Fed Chair Jerome Powell and the Board of Governors to enable Cook to operate as a Board member throughout the litigation.
Judge Cobb noted, “The public interest in Federal Reserve independence supports Cook’s reinstatement, as this independence is vital in ensuring the stability of the nation’s banking system.”
Cook’s legal team argued in Washington federal court that Trump’s attempt to dismiss her on the grounds of “mortgage fraud” was unlawful and lacked “cause,” the sole reason for which a Fed governor can be ousted. “Cause” typically implies some form of misconduct.
Cobb will hear the merits of the case in more detail at a future hearing.
Trump had sought to remove Cook in late August, citing mortgage fraud accusations by one of his political appointees. Cook has not faced any criminal charges.
“Governor Cook did not ever commit mortgage fraud,” Cook’s lawyers wrote in a filing last week.
The Federal Reserve declined to comment on the order. It previously said in a statement that it would “abide by any court decision.”
Abbe Lowell, who is representing Cook, said in a statement: “Today’s ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference. Allowing the President to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law. Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”
Cook is the first Black woman to serve as a governor on the board of the Fed in its more than 110-year history. Before she joined the Fed, she was a professor of economics and international relations at Michigan State University.
