Supreme Court Blocks Trump from Firing Fed Governor Lisa Cook, Expands Presidential Power Over Other Agencies
The Supreme Court ruled on Monday that President Trump cannot fire Federal Reserve Governor Lisa Cook, protecting the Fed's independence from political interference. However, in a separate ruling, the court expanded Trump's power to remove members of other independent agencies like the FTC.
The Ruling
The Supreme Court delivered a setback to President Donald Trump on Monday, rejecting his attempt to fire Federal Reserve board member Lisa Cook, while in a separate case giving him a freer hand to exert control over other hitherto independent federal agencies. The narrow 5-4 decision did not weigh in on the ability of Trump or subsequent presidents to remove governors of the U.S. Central Bank, instead preserving Cook's position on procedural grounds.
What Happened
The ruling came nearly nine months after Trump said he was firing Cook because she had been accused by a Trump-appointed official of committing mortgage fraud before becoming a Fed governor. An appointee of former President Joe Biden, she had denied the allegations of mortgage fraud, which were made last summer by FHFA Director Bill Pulte. Cook, the first African American woman to serve on the Fed Board, will remain in her position.
The Court's Reasoning
"Under our precedents, Cook was entitled to notice and some opportunity to respond prior to her termination." Roberts cited the words Congress chose in 1913 and again in 1935, adding: "All that is required is notice 'to the officer of the charges made against him' and 'an opportunity to be heard in his defense.'" The court concluded that the Federal Reserve is different from other independent agencies, in part based on its unique structure and history.
Broader Impact
In the latter case, the court overturned a key 1935 Supreme Court ruling called Humphrey's Executor v. United States, which upheld restrictions on the president's power to fire FTC members. While Cook can remain in office for now, the court granted Trump free rein to continue firing members of agencies that were specifically set up by Congress to be free of political interference. Cook stated: "This was never about mortgage documents signed years before I became a Federal Reserve governor. It was an attempt to remove me on a manufactured pretext because I refused to bow to political pressure."