Topline
A federal judge temporarily halted President Donald Trump’s bid to fire Federal Reserve governor Lisa Cook, allowing her to remain on the job while her legal challenge against the president’s effort to remove her over allegations of mortgage fraud moves forward.
In her Tuesday night ruling, D.C. federal judge Jia Cobb said: “The Court finds that Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision.”
The judge granted a preliminary injunction requiring the Federal Reserve to allow Cook to continue serving on its board of governors for now.
Cobb’s ruling noted that the “best reading” of the provision that allows a president to remove a central bank governor “for cause” is “limited to grounds concerning a Governor’s behavior in office” and how they are executing their duty.
Additionally, the judge noted that Trump’s firing of Cook violated her “procedural rights under the Fifth Amendment’s Due Process Clause,” and she demonstrated she could face “irreparable harm from her removal.”
The Trump administration has not yet commented on the ruling, but it is likely to file an appeal.
The preliminary injunction comes just one week before a highly anticipated Federal Reserve policy meeting next week on September 16 and 17, where it is expected to vote on lowering interest rates. Tuesday night’s ruling means Cook will likely be able to attend the meeting.
In a statement shared with multiple outlets, Cook’s lawyer Abbe Lowell said: “This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference. Allowing the President to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law. Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”