Greenspan, Bernanke, Yellen urge Supreme Court to let Lisa Cook keep Fed governor

A coalition of former top economic officials urged the Supreme Court on Thursday to preserve the Federal Reserve's independence and allow Lisa Cook to remain as a central bank governor while her lawsuit challenging her firing by President Donald Trump proceeds through the courts. The filing comes as the justices weigh the administration's emergency bid to remove Cook before the case can be decided.

The letter, signed by Greenspan, Bernanke, Yellen and other former officials appointed by presidents of both parties, argues that ousting Cook now would subject the Fed to daily political pressure and erode public confidence in monetary policy. The administration has sought to remove Cook since Aug. 25; a judge said in September that the move probably illegal. The filing notes that no president has fired a sitting Fed governor in the Fed's 112-year history.

A judge previously ruled in September that Trump's move to fire Cook probably was illegal. An appeals court rejected an emergency plea to oust Cook before the Fed's most recent policy meeting, at which Cook joined in a vote to cut the federal funds rate by a quarter-point. A day after that meeting, the administration turned again to the Supreme Court seeking her prompt removal.

In their filing, lawyers for Greenspan, Bernanke, Yellen and the other signatories argued that immediately ousting Cook would expose the Federal Reserve to political influences, thereby eroding public confidence in the Fed's independence and jeopardizing the credibility and efficacy of U.S. monetary policy.

The list of signatories includes former Treasury secretaries, heads of the Council of Economic Advisers and former Sen. Phil Gramm, R-Texas, a former chairman of the Senate Banking Committee.

Trump has accused Cook of mortgage fraud because she appeared to claim two properties, in Michigan and Georgia, as 'primary residences' in June and July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and a smaller down payment than if one of them was declared as a rental property or second home. Cook has denied any wrongdoing and has not been charged with a crime.

According to documents obtained by The Associated Press, Cook did specify that her Atlanta condo would be a 'vacation home,' according to a loan estimate she obtained in May 2021. In a form seeking a security clearance, she described it as a '2nd home.' Both documents appear to undercut the administration's claims of fraud.

The attempt to fire Cook differs from Trump's dismissal of board members of other independent agencies. Those firings—at the National Labor Relations Board, Federal Trade Commission and Consumer Product Safety Commission—have been done at will. In allowing those firings to proceed for now, the Supreme Court cautioned that it viewed the Fed differently. Trump has invoked the provision of the law that set up the Federal Reserve and allowed for governors to be dismissed 'for cause.'