A federal appeals court Monday rejected President Trump’s move to fire Federal Reserve board member Lisa Cook.
In a 2-1 decision, the panel refused to halt a lower court ruling reinstating Ms. Cook, who the court said had been fired without giving her proper notice.
The D.C. Circuit Court of Appeals agreed, saying Ms. Cook should have had proper notice and due process when being terminated because under the Federal Reserve Act, she may only be removed “for cause.”
“The Supreme Court and this court have repeatedly held that a public official with “for cause” protection from removal has a constitutionally protected property interest in her position,” wrote Judge Bradley Garcia, a Biden appointee.
“Given that Cook has a property interest in her position, she is entitled to “some kind” of process before removal.”
Judge Garcia was joined by J. Michelle Childs, an Obama appointee.
Meanwhile, Judge Gregory G. Katsas, a Trump appointee, dissented. He noted Mr. Trump fired Ms. Cook after allegations surfaced that she committed mortgage fraud.
“The President plainly invoked a cause relating to Cook’s conduct, ability, fitness, or competence. The allegations against Cook could constitute mortgage fraud if she acted knowingly, and that is a felony offense,” he wrote.
Ms. Cook was appointed to her term as governor of the Federal Reserve in 2023 by then-President Biden.
Mr. Trump sought to fire her last month on allegations that she committed mortgage fraud in 2021.
She allegedly got a $203,000 mortgage for a property in Michigan that she said was her “primary residence” but just a few weeks later got another mortgage for $540,000 for a Georgia property that she also promised to use as her primary residence.
Mr. Trump terminated her, suggesting that the allegations call into question her trustworthiness.
The ruling from the appeals panel is expected to be appealed to the Supreme Court by the Trump administration.
It also comes a day before the Federal Reserve is expected to meet and discuss cutting interest rates this week.
