The US Supreme Court has ruled on a high-profile case in which Federal Reserve board member Lisa Cook challenged President Donald Trump’s right to remove her from her duties. The court ruled that in this case the president cannot do this, although theoretically he has the right to make such a decision, but only for “an important reason.”
US Supreme Court decidedthat the president of the country cannot fire Fed board member Lisa Cook. The reasoning part of the decision states that “Congress limited the president’s powers to remove managers (of the Federal Reserve.— “Kommersant”) for good reason – to preserve the independence of the Federal Reserve System and to continue the “long tradition” of monetary policy … conducted independently of … the influence of the executive branch.”
Fed – independent government agency. The members of its governing body, the Board of Governors, are appointed by the President of the United States and confirmed by the Senate. At the same time, the 12 Federal Reserve banks that form the basis of the Federal Reserve structure are private corporations with joint-stock ownership. The main shareholders are commercial banks, which receive dividends but do not have voting rights. The system includes the Federal Open Market Committee. It consists of seven members of the board of governors, the president of the Federal Reserve Bank of New York and four more of the 11 presidents of the federal reserve banks. All Federal Reserve Banks have one representative on the Federal Advisory Council.
The court began considering the case after Donald Trump last August demanded remove Lisa Cook from office. The US President cited accusations made by the head of the Federal Housing Finance Agency, Bill Pulte, as the reason for his dismissal. He said that Ms. Cook, even before taking office, falsified bank documents and property records in order to obtain favorable terms on mortgage loans. Lisa Cook herself denies the accusations. She filed suing Donald Trump, claiming that he fabricated a reason for her dismissal and violated the Federal Reserve Act.
As a result, the Supreme Court stated that in this case the president of the country does not have the right to dismiss a member of the Fed’s governing council, since decisions on this regulator are within the powers of the US Congress, which adopted the corresponding law on the Fed.
“Any changes to this scheme must come from Congress, not the courts. “That is why we cannot accept the government’s argument in this case,” the court said in its decision. “It would allow the President to remove a member of the Federal Reserve System at any time, for any reason, without notice and without judicial review.”
However, the court noted that “the ultimate question of whether the President may remove Ms. Cook from office for an important reason will depend in part on the underlying reasons.— “Kommersant”) facts. We have not addressed the facts in this opinion because they have not yet been determined or analyzed to the appropriate legal standard.”
Lisa Cook welcomed the outcome of the case, saying that “the court’s decision reaffirms a principle that has undergirded sound economic management for generations: that the Federal Reserve should make all of its decisions free from political interference.”
Neither Donald Trump nor members of his administration have yet commented on the court’s decision.
