In its filing, Solicitor General D. John Sauer argued that the case “involves improper judicial interference with the President’s removal authority,” and urged the justices to freeze a lower court order that reinstated Cook.
“Put simply, the president may reasonably determine that interest rates paid by the American people should not be set by a governor who appears to have lied about facts material to the interest rates she secured for herself—and refuses to explain the apparent misrepresentations,” the administration said.
Cook’s firing on August 25 followed allegations from within the Trump administration that she had committed mortgage fraud by declaring two different homes as her primary residence—a practice that can result in more favorable loan terms. Documents later showed Cook sometimes listed the second property as a vacation home. A federal court blocked her removal on September 10, with Judge Jia Cobb writing that Trump had not identified any conduct or job performance issues that would harm the board or public interest.
Legal experts say the case could set a precedent for the president’s authority to remove members of independent agencies. The core issue of Fed independence is whether the central bank can operate without direct control from the president, no matter who is in office.
“If you want an independent Fed, then you want the Fed governors to have certain kinds of legal protections against pressure from the president,” Kenneth Katkin, law professor at Northern Kentucky University’s Chase College of Law, told Mortgage Professional America.