Federal Reserve Official Lisa D. Cook Stays in Position Following Supreme Court Announcement
The United States highest court declared on Wednesday that Fed board member Lisa D. Cook remains to serve temporarily, postponing action on a request to remove her at once.
Justices to Consider Arguments in January
The country's highest court announced it will consider spoken arguments on the legal matter in January.
Earlier in the day, the court reviewed the president's attempt to remove Cook – representing the first-ever attempt by a president to terminate a Federal Reserve official.
Temporary Reprieve for Central Bank Official
The justices' decision means Cook stays in her position currently. The justices refused to immediately decide on a motion to put on hold a lower court ruling that prevents the president from removing the Biden appointee while legal proceedings proceed in a lower court.
1913 Law and Autonomy
When Congress created the Fed in 1913, it passed the Federal Reserve Act, which included clauses to protect the central bank from outside influence. The act requires that governors be removed by a president only for valid reasons, though the law does not specify the term nor establish processes for dismissal. This law has never been tested in the judicial system.
Court Decision on Removal Grounds
Jia Cobb, a Washington-based judge, on September 9 decided that allegations Cook committed mortgage fraud before assuming her role were likely insufficient grounds for removal under the existing law.
Background of the Court Case
Cook, the first African American woman to hold the position as a Fed governor, filed a lawsuit against the executive in August after he announced he would fire her. Cook has asserted that the accusations leveled at her did not give the president the lawful power to remove her and were a excuse to terminate her for her monetary policy views.
