Fed Governor Lisa D. Cook Stays in Post After High Court Announcement
The United States highest court announced on midweek that Fed board member Lisa D. Cook remains to serve temporarily, postponing a decision on a petition to remove her immediately.
Justices to Consider Arguments in the New Year
The country's top judicial body announced it will consider spoken arguments on the case in January.
That morning, the court considered the chief executive's effort to dismiss Governor Cook – representing the first-ever attempt by a US president to terminate a Fed official.
Temporary Relief for Central Bank Official
The justices' decision means Cook stays in her role currently. The judges declined to rule at once on a motion to put on hold a judge's order that prevents the president from removing the Biden appointee while legal proceedings proceed in a lower court.
1913 Law and Political Independence
When Congress established the Fed in the early 20th century, it passed the central banking law, which included provisions to shield the central bank from political interference. The act requires that board members be removed by a president only “for cause”, though the statute does not define the term nor establish processes for removal. This legislation has never been tested in the judicial system.
Judge's Ruling on Removal Grounds
US District Judge Jia Cobb, a DC-based federal judge, on September 9 ruled that claims Cook engaged in housing loan fraud before assuming her role were likely insufficient reasons for removal under the Federal Reserve Act.
Background of the Legal Battle
Lisa Cook, the first African American woman to serve as a Federal Reserve board member, sued the executive in August after he announced he would remove her. Cook has said that the accusations leveled against her did not give the president the lawful power to dismiss her and were a excuse to terminate her for her monetary policy stance.
