Trump renews Lisa Cook firing effort with August response deadline
The White House has reopened its bid to remove Fed Governor Lisa Cook, testing limits the Supreme Court left unresolved in June.
By Hana Yoshida · Markets Reporter
3 min read
President Donald Trump has renewed his effort to remove Federal Reserve Governor Lisa Cook, sending her an August 5 notice that she could be fired and giving her until August 26 to respond. The latest step in the Trump Lisa Cook firing dispute matters because the Supreme Court allowed her to remain in office in June while her challenge continues, but left open whether the administration can establish lawful grounds to remove her.
The letter, signed by White House Deputy Chief of Staff Dan Scavino, says the president is considering Cook’s removal over allegations about statements on mortgage applications. Reuters reported that the White House characterized the alleged conduct as gross negligence showing she was unfit for office; the allegations have not been proven, and Cook denies them.
What did the Supreme Court decide about Lisa Cook’s removal?
In a 5-4 June decision, the Supreme Court ruled that Cook could stay on the Fed’s Board of Governors while her lawsuit against the earlier removal attempt proceeds, according to SCOTUSblog. The Court acted on a temporary request from the administration and did not decide whether the mortgage-related allegations were true or whether they meet the legal standard for removal.
Chief Justice John Roberts wrote for the majority that the government was unlikely to prevail because Cook had not received the procedural protections required by statute. The Court said she needed, at a minimum, an explanation of the evidence, a way to answer it and a deadline for doing so, as CNBC’s transcript of the decision reported.
Roberts also said the prior notice failure did not prevent Trump from beginning a new removal process that gives Cook the required opportunity to respond, according to Fortune. The August 5 letter is the administration’s effort to follow that route, rather than a completed removal.
Why the Fed’s independence is central to the case
Federal Reserve governors are nominated by the president, confirmed by the Senate and serve staggered 14-year terms. Federal law permits their removal only “for cause,” a protection Congress designed to limit outside political pressure on the central bank, SCOTUSblog reported.
The Supreme Court majority said accepting the administration’s earlier position would effectively turn that protection into at-will employment. Roberts wrote that both the actual independence of the Fed and its appearance of independence are important to its structure.
The case has already moved through lower courts. U.S. District Judge Jia Cobb concluded that Cook was substantially likely to show the initial removal violated federal law and that she had not been given adequate notice or a chance to respond; a divided D.C. Circuit panel left that order in place, according to SCOTUSblog.
What are the allegations and Cook’s response?
The initial effort centered on claims that Cook listed properties in Ann Arbor, Michigan, and Atlanta as primary residences on mortgage documents. Her lawyer, Abbe Lowell, has said Cook had principally lived in the Ann Arbor home since buying it in 2005, and that a reference to the Atlanta condominium as a primary residence was an isolated notation; other records described it as a vacation or second home, Fortune reported.
Lowell called the renewed allegations baseless and said Cook would challenge the new action. The new notice addresses the process fault identified by the Court, but it does not resolve the separate question of whether the administration has sufficient cause under the law to remove a Fed governor.
This story draws on original reporting from Fortune.