Federal Reserve Chair Jerome Powell administers the oath of office to Lisa Cook to serve as a member of the Board of Governors at the Federal Reserve System during a ceremony at the William McChesney Martin Jr. Building of the Federal Reserve May 23, 2022, in Washington, D.C. (Photo by Drew Angerer/Getty Images)
WASHINGTON — A federal judge issued a preliminary injunction late Tuesday temporarily barring the Federal Reserve from removing Lisa Cook as a member of its board.
U.S. District Judge Jia M. Cobb wrote in a 49-page opinion that President Donald Trump “violated the Federal Reserve Act because (Cook’s) purported removal did not comply with the statute’s ‘for cause’ requirement” and that his attempts to remove Cook from the board “deprived her of procedural rights guaranteed by the U.S. Constitution.”
Cobb added the case marks the first time in the Federal Reserve’s 111-year history that a president has sought to remove one of its members “for cause.”
The Federal Reserve Act doesn’t actually define what “for cause” entails, but Cobb wrote that reasons for firing under the law “are limited to grounds concerning an official’s behavior in office and whether they have been faithfully and effectively executing statutory duties.
“The ‘for cause’ standard thus does not contemplate removing an individual purely for conduct that occurred before they assumed the position.”
Trump announced in late August that he wanted to remove Cook, the first Black woman to serve on the Federal Reserve Board, alleging she falsified some information in a mortgage application.
Cook’s attorneys filed a lawsuit in federal court a few days later, arguing that Trump’s attempts were political and violated her due process rights.
Judge Cobb agreed with their assessment that the president seeking to remove Cook represented irreparable harm and that “the public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement.”
Cobb wrote that she “likely cannot directly ‘enjoin the President in the performance of his official duties’ to require him to reappoint Cook.” So she instead issued a preliminary injunction directing Federal Reserve Chairman Jerome Powell “and the Board of Governors to allow Cook to continue to operate as a member of the Board for the pendency of this litigation.”