The Supreme Court will hear oral arguments Jan. 21 on whether President Donald Trump has the authority to remove Federal Reserve Gov. Lisa Cook.
Trump announced her firing in August, citing allegations that she committed mortgage fraud involving two properties she owns.
Cook, the first Black woman to serve on the Fed's Board of Governors, denies the claims and has filed suit to block her removal.
CNBC reported that in early September, a federal district judge in Washington ruled that Cook could not be dismissed while her case proceeds.
The U.S. Court of Appeals for the District of Columbia later upheld that decision, prompting Trump to ask the Supreme Court to intervene.
District Judge Jia Cobb wrote in her opinion that Cook had shown a strong likelihood of success in her argument that her firing violated the Federal Reserve Act's "for cause" provision.
Cobb said the law limits dismissal to issues related to "behavior in office," and the allegations against Cook predate her time on the board.
Solicitor General D. John Sauer, representing the Trump administration, argued in filings that Cook lacks a constitutional property right to retain her position while litigation continues.
He maintained that the law gives the president discretion to remove a governor for any stated cause relating to conduct, ability, fitness, or competence.
The Supreme Court's ruling could clarify the scope of presidential authority over independent financial regulators.
The Department of Justice has opened a criminal investigation into whether Cook committed mortgage fraud in connection with homes she owns in Michigan and Georgia.
Grand jury subpoenas were reportedly issued in both states after the Federal Housing Finance Agency referred the matter for prosecution.
Agency Director Bill Pulte said Cook failed to rebut the allegations in her lawsuit challenging her removal, which accused her of misrepresenting both homes as primary residences to obtain more favorable mortgage terms.
The investigation is being handled by federal prosecutors in Michigan and Georgia.
The case carries broad implications relating to the power of the presidency to manage the Federal Reserve and its impact on the U.S. economy.
Jim Mishler ✉
Jim Mishler, a seasoned reporter, anchor and news director, has decades of experience covering crime, politics and environmental issues.
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