Trump Channels Taft in Bid to Remove Fed Governor Lisa Cook

President Donald Trump is attempting to remove Federal Reserve Governor Lisa Cook from her post for cause. In doing so, he's drawing on precedent set by one of his Republican predecessors, President William Howard Taft. The process could set a standard for how difficult or easy it is for a president to remove officials from the central bank.

The White House initiated the process this month with a letter notifying Cook of the allegations that she committed bank fraud and asking her to respond to the charges. This follows a Supreme Court ruling in Trump v. Cook earlier this summer, which solidified the for-cause standard for removing Fed governors and stated that the White House's initial attempt at removal was insufficient.

According to Jeremy Kress, a law professor at the University of Michigan, 'This letter is basically the Truth Social post in a more legalistic format with those additional details that the Supreme Court required.' The Supreme Court's decision gave little insight into what the rest of the process should look like, leaving it up to the White House to develop a sufficiently evenhanded approach.

Cook has until August 26 to respond to the letter, and if Trump decides he has sufficient cause to remove her, she will likely challenge that determination in court. David Zaring, a professor of legal studies and business ethics at the University of Pennsylvania's Wharton School of Business, noted that 'I wonder if the Supreme Court preserved some discretion for itself by not going into what, exactly, is required for for-cause removal.'

The judicial record is light on precedent when it comes to for-cause removal standards. Zaring pointed out that Taft's opinion from the 1926 majority opinion in Meyers v. United States factored heavily into the Supreme Court's decision.