The governor of the Federal Reserve, Lisa Cook, filed a lawsuit arguing that President Donald Trump does not have the authority to get her out of office as governor of the Federal Reserve.
According to Reuters, the case could shape the independence of the White House Fed.
Cook’s demand says that Trump violated the federal law, which allows the elimination of a Fed governor only for cause, when she announced on August 25 that she would be fired. Trump accused her of committing mortgage fraud in 2021, before joining the Fed Board.
The case is expected to reach the Supreme Court. While the court has previously allowed the presidents to eliminate officials from other agencies, he also suggested that the Fed could be treated differently. The questions about the independence of the Federal Reserve have already unstable the markets, with the dollar falling after Trump’s announcement.
A Fed spokesman said before the demand that the institution would follow any judicial ruling would follow. Cook, appointed in 2022 by President Joe Biden, is the first black woman to serve on the Fed Board of Directors.
Trump previously eliminated Gwynne Wilcox, the first black woman at the National Board of Labor Relations, and has fired officials of traditionally viewed agencies as independent. The law that created the Fed does not define the “cause” for elimination, and no governor of the Fed has never been eliminated before. The courts could look at other statutes, where the cause has been interpreted to include the negligence of duty, embezzlement or inefficiency.
The mortgage issue was first raised in August by Williamuffa, head of the Federal Housing Finance Agency. He sent the matter to the Attorney General Pamela Bondi.
Cook’s financial dissemination lists three mortgages, with two marked as primary residences, which generally qualify for lower rates. Some experts question whether loans taken before their Fed appointment could justify their elimination.
The Trump administration can argue that any protection against removal becomes conflict with the presidential powers to control the Executive Power. In her letter from August 25 to Cook, Trump accused her of “deceptive and criminal conduct in a financial issue” and said he lacked confidence in his integrity.
Cook replied that “there are no causes under the law, and (Trump) has no authority to eliminate it. His lawyers added that Trump’s demands lack an adequate, basis or legal authority. “
If Cook is eliminated, Trump would win his fourth appointment for the Board of seven members of the Fed. He has often criticized the president of the Fed, Jerome Powell, for not reducing interest rates and for handling an important renewal project, although he has not stopped trying to eliminate Powell before his mandate ends in May.
The Trump administration has also leveled the accusations of mortgage fraud against political opponents, including Senator Adam Schiff and New York Attorney General Letitia James, who deny irregularities.
(RTE)
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