Federal Reserve governors can only be removed “for cause” and the solicitor general said Trump had determined that the mortgage fraud allegations make Cook “unfit to continue serving on the Federal Reserve Board”.
Among the alleged false statements attributed to Cook, she is accused of claiming two primary residences, one in Michigan and another in Georgia.
Cook, who was appointed by Democratic President Joe Biden and is the first black woman to serve on the Fed’s board, has denied the allegations and has not been charged with a crime.
She filed a lawsuit challenging Trump’s bid to fire her, calling it an “unprecedented and illegal” move.
The legal dispute marks the latest test of presidential powers under Trump, as the 79-year-old Republican moves forcefully to exert executive authority over all of government.
By removing Cook, Trump could add another voice to the Fed’s board to try and sway its decisions on interest rates.
The Supreme Court’s conservative majority recently allowed Trump to fire members of other independent government boards, but it created a potential carve-out for the Fed in its ruling.
– Agence France-Presse