Supreme Court weakens agency protections, shields Federal Reserve independence

The Supreme Court kept Lisa Cook in her Federal Reserve seat while, in a separate ruling, it erased the 1935 Humphrey’s Executor precedent that had shielded many independent agencies from at-will removal. In Cook’s case, the justices voted 5-4 to let her remain in office as her challenge to Donald Trump’s firing attempt moved forward; in the FTC case, they voted 6-3 to expand presidential removal power over independent regulators. Chief Justice John Roberts said applying the new rule to the Fed would turn for-cause protection into at-will employment, while Justice Clarence Thomas dissented and said the court was treating a presidential removal injunction differently from the rest of its separation-of-powers doctrine.

The Federal Reserve was created by Congress on Dec. 23, 1913, as a central, independent governmental agency in Washington, D.C., with 12 regional Reserve Banks and a seven-member Board of Governors serving staggered 14-year terms. The structure limits any one president’s ability to stack the board and keeps monetary policy at arm’s length from day-to-day politics.

Cook first took office on May 23, 2022, was reappointed on Sept. 8, 2023, sworn in on Sept. 13, 2023, and is serving a term that runs to Jan. 31, 2038. She is the first Black woman to serve on the Federal Reserve Board, and the court’s order kept her in place after Trump’s attempt to remove a Fed governor, the first such firing effort in the central bank’s 111-year history.