Lisa Cook can keep her job on the Federal Reserve Board of Governors — for now.
U.S. District Judge Jia Cobb ruled in Cook’s favor Tuesday, granting a temporary restraining order that will allow Cook to continue to serve on the Fed’s board and its rate-making committee while her case proceeds.
The ruling marks a significant legal setback for President Donald Trump, who moved to fire Cook on Aug. 25 based on a criminal referral letter sent to the Department of Justice by Bill Pulte, director of the Federal Housing Finance Agency. Pulte alleged Cook fraudulently claimed two homes as her primary residence, then allegedly received rental income from one of the properties.
In her 49-page ruling, Cobb acknowledged Cook’s legal challenge would “benefit from further briefing on a non-emergency timeline,” but said her attorneys “made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision.”
The real estate transactions referenced in Pulte’s criminal referral letter occurred prior to Cook’s becoming a Fed governor. Cobb’s ruling states that while the legislation establishing the Federal Reserve System does not define “for cause,” her reading of legal precedent is that a Fed governor’s removal would be limited to behavior that occurred while in office and “whether they have been faithfully and effectively executing their statutory duties.”
Additionally, Cobb ruled Trump’s attempted removal of Cook likely violated her procedural rights under the Fifth Amendment’s due process clause.
The federal judge had previously expressed skepticism at an Aug. 29 preliminary hearing that Trump’s posting of the letter announcing Cook’s firing to social media satisfied due process requirements.
“Was anything sent to her directly?” Cobb asked at the hearing, according to CNN. “You still have to serve someone. You have to give them information.”
Cook’s lead attorney, Abbe David Lowell of Lowell & Associates, praised the court decision in a statement provided to Scotsman Guide.
“This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference,” Lowell stated. “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.”
Trump’s attorneys will almost certainly appeal the ruling. A White House spokesperson, Kush Desai, informed multiple media outlets Tuesday that “this ruling will not be the last say on the matter, and the Trump administration will continue to work to restore accountability and confidence in the Fed.”
