Senate Banking Democrats urge Scott to delay Fed nominee hearing

WASHINGTON — Democrats on the Senate Banking Committee are urging its chairman to delay a hearing scheduled for next week for a Federal Reserve Board nominee following President Donald Trump’s attempt to fire a Fed governor sitting in a separate seat.

The panel’s Democrats urged Chairman Tim Scott, R-S.C., to postpone the Sept. 4 confirmation hearing that includes Stephen Miran, tapped by Trump to fill the Fed seat of Adriana Kugler, who resigned this month.

The Democrats said the Banking, Housing and Urban Affairs Committee should put Miran’s nomination on hold until it tackles broader questions related to Trump’s effort to “unlawfully remove” Fed Governor Lisa Cook. They said it’s the first time in history a president has tried to fire a Fed board member.

“This action raises serious legal concerns and threatens the independence of the Federal Reserve, which could make mortgages, credit cards, auto loans, and everyday goods more expensive for American families,” the Democrats wrote in the Thursday letter.

The letter to Scott, and a separate letter to Federal Housing Finance Agency Director William Pulte accusing him of “spinning rumors” and urging him to focus on housing issues, came as a federal court was considering Cook’s effort to block Trump from firing her. The U.S. District Court for the District of Columbia heard arguments Friday in Cook’s motion seeking a temporary restraining order.

“The Senate should not consider any nominee to the Federal Reserve during this unprecedented attempt to undermine its independence,” the committee Democrats’ letter to Scott says. “The Committee should instead hold an oversight hearing on the legal and economic implications of the President’s actions.”

Ranking member Elizabeth Warren, D-Mass., led the letter, which also was signed by Sens. Jack Reed, D-R.I.; Mark Warner, D-Va.; Chris Van Hollen, D-Md.; Catherine Cortez Masto, D-Nev.; Tina Smith, D-Minn.; Raphael Warnock, D-Ga.; Andy Kim, D-N.J.; Ruben Gallego, D-Ariz.; Angela Alsobrooks, D-Md.; and Lisa Blunt Rochester, D-Del.

A spokesperson for Scott did not respond to a request for comment.

Trump on Monday released a letter saying he had dismissed Cook for alleged fraud on mortgage applications. He said he was acting within his authority under Article II of the Constitution as well as the Federal Reserve Act.

His move came while he is pressuring the Fed to lower interest rates. Cook, as part of the Federal Open Market Committee, has voted to maintain rate levels.

Cook filed a lawsuit Thursday against Trump in federal court to try to retain her seat “and safeguard her and the Board’s congressionally mandated independence.”

In the first court hearing on the case Friday, U.S. District Judge Jia Cobb questioned lawyers for Cook and Trump on whether the president has cause to fire Cook, whether she was given due process and whether her removal would cause irreparable harm.

Cook’s attorney, Abbe Lowell, argued that irreparable harm would occur if Cook doesn’t retain her seat while she fights for it in court. He said the Senate was “not stellar” in the way it goes about approving Trump’s nominees and that it’s possible the chamber would move ahead with a confirmation of Cook’s replacement even while she disputes Trump’s removal of her.

“That hypothetical is not so hypothetical in the world we live in,” Lowell said.

Much of the hearing centered on what removing a Fed official “for cause” means in the Federal Reserve Act, where it is not defined. Lowell said that under a Supreme Court case known as Humphrey’s Executor, “cause” is understood to mean inefficiency, malfeasance and neglect.

Pulte raised the allegations against Cook — that she claimed two different homes as primary residences on mortgage applications — in a series of postings on the social platform X. He then made a criminal referral to the Justice Department, which Trump cited in his letter to Cook.

Lowell said that reasons for cause can be argued beyond what’s outlined in Humphrey’s, but Trump’s justification doesn’t meet the standard.

“It’s not hard to come up with a one-sentence definition of what it’s not,” Lowell said.

An attorney representing Trump argued that the president has discretion in determining cause because the Federal Reserve statute doesn’t specifically define it.

“That’s when the president’s power is at its apex,” said Principal Deputy Attorney General Yaakov Roth.

Lowell also said Cook didn’t receive due process because she hasn’t had a chance to rebut Pulte’s charges and that Pulte used words like “potentially” illegal behavior in his X posts.

Roth countered that Pulte posted documents showing that Cook made misstatements on her mortgage applications.

Pulte on Thursday posted on X another allegation of Cook making misrepresentations on a third property.

Senate Minority Leader Charles E. Schumer, D-N.Y., Sen. Cory Booker, D-N.J., and Warren wrote to Pulte on Friday admonishing him to concentrate on his job as head of the housing finance agency rather than trying to change the Fed board’s makeup.

“We urge you to reorder your priorities and begin taking meaningful actions to bring affordable housing and homeownership into reach for the American people,” the Democratic lawmakers wrote.