By Charlene Crowell
Over several months, the Trump Administration has pressed the Federal Reserve, the nation’s central bank, to lower interest rates as a cure for the nation’s ailing economy. Those efforts have now seen two unprecedented developments.
On August 28 President Donald Trump announced his intention to fire the only Black female ever to serve in the Fed’s 113-year history. Then on September 7, the Department of Justice opened a criminal investigation of Governor Lisa Cook in the aftermath of alleged but undocumented mortgage fraud.
Although the final outcome of a related lawsuit has yet to be reached, an early legal victory came on September 9 when Federal District Judge Jia M. Cobb issued an injunction allowing Cook to continue her service as a member of the Board.
In part, Judge Cobb’s 49-page order states, “Cook is one of seven members of a Board that is, by design, not intended to be susceptible to policy pressure, let alone tasked with implementing the President’s agenda…President Trump has not identified anything related to Cook’s conduct or job performance as a Board member that would indicate that she is harming the Board or the public interest by executing her duties unfaithfully or ineffectively.”
A Georgia native, Governor Cook is a magna cum laude graduate of Atlanta’s Spelman College. Her second BA degree in philosophy, politics and economics is from the University of Oxford, England. Her Ph.D. in macroeconomics and international economics is from the University of California, Berkeley. She also speaks five languages – English, French, Russian, Spanish, and Wolof, a Niger–Congo language spoken in a subregion of West Africa facilitated professional associations in these and other nations.
Prior to her service at the Fed, Cook’s teaching career began at Harvard University’s Kennedy School of Government as a faculty member. She also served as deputy director for Africa Research at Harvard’s Center for International Development. Other university positions took her to both Stanford University’s Hoover Institution and Michigan State University. Other professional endeavors include advising the Nigerian government on banking reforms and the Rwanda government on economic development.
Nominated to the Fed by President Joe Biden, Governor Cook initially served a partial, unexpired term before she was reappointed to a full, 14-year term of service that runs through January 31, 2038. Each of the 7-member Fed Board of Governors serve staggered terms, thereby ensuring institutional continuity and independence from other branches of government set forth in the institution’s governing statute, the Federal Reserve Act of 1913.
In response to removal attempts, a surge of support to retain Governor Cook has emerged from diverse domestic and global experts.
For example, on September 2, 593 economists from universities here and in 22 foreign universities across Canada, Europe, and Israel were joined by independent economists, 16 research organizations, and four investment firms in the broadest support expressed to date. Their open letter reads in part:
“Recent public statements about Governor Cook—including threats of removal and a claim that she has been fired—have arrived alongside unproven accusations,” wrote the group. “This approach threatens the fundamental principle of central bank independence and undermines trust in one of America’s most important institutions. That trust is a cornerstone of the system that has fueled America’s economic vitality over the decades. We urge all branches of government to uphold the law and the norms that protect U.S. economic stewardship.”
Two other joint statements of support for Governor Cook spoke in more candid terms.
“Let’s be clear: this is a racist, misogynistic, and unlawful attack on the integrity and independence of the Federal Reserve,” wrote the Congressional Black Caucus. “It is a dangerous attempt to politicize and exert control over the central bank — one that will only continue to damage the economy, harm hardworking Americans, and undermine our credibility on the world stage.”
“President Trump has now moved from dangerous rhetoric to direct assaults on economic governance”, wrote a 12-member national coalition of civil rights organizations that include: the Joint Center for Political and Economic Studies, the Lawyers’ Committee for Civil Rights Under Law, Leadership Conference on Civil and Human Rights, NAACP, National Action Network, National Fair Housing Alliance, National Urban League and the U.S. Black Chambers, Inc.
If the Federal Reserve’s independence can be preserved, there is still hope for consumers yearning for financial fairness, due to a seldom-mentioned role: consumer protection and community development.
The Board of Governors helps to ensure that the voices and concerns of consumers and communities are heard at the central bank by conducting consumer-focused supervision, research, and policy analysis, and, more generally, by promoting a fair and transparent consumer financial services market. Regular readers of this column may recall that the Federal Reserve is often a primary source for findings on racial wealth inequality, fair lending, and community reinvestment.
Through its 12 Reserve Banks and their 24 Branches, data and information gathered regionally about businesses and the needs of local communities are then factored into monetary policy decisions by the Federal Open Market Committee – a division of the Fed that includes all seven Board of Governors.
Governor Cook not only understands this key role; but embraces it wholeheartedly. As 2024’s commencement speaker at Georgia College and State University (GCSU), located in her hometown of Milledgeville, Governor Cook spoke these words:
“For me personally, from an early age, GCSU, and the world it opened to me, was evidence that I could do anything in life and be anyone I dreamed of being, regardless of where I was raised or my race and gender……whoever you are, wherever you come from, and whatever anyone has said about you and your capabilities,” Cook said, “you can be anything and anyone you want to be.”
