The members of the Board shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employment in any member bank, except that this restriction shall not apply to a member who has served the full term for which he was appointed. Upon the expiration of the term of any appointive member of the Federal Reserve Board in office on August 23, 1935, the President shall fix the term of the successor to such member at not to exceed fourteen years, as designated by the President at the time of nomination, but in such manner as to provide for the expiration of the term of not more than one member in any two-year period, and thereafter each member shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President. Of the persons thus appointed, 1 shall be designated by the President, by and with the advice and consent of the Senate, to serve as Chairman of the Board for a term of 4 years, and 2 shall be designated by the President, by and with the advice and consent of the Senate, to serve as Vice Chairmen of the Board, each for a term of 4 years, 1 of whom shall serve in the absence of the Chairman, as provided in section 244 of this title, and 1 of whom shall be designated Vice Chairman for Supervision. The Vice Chairman for Supervision shall develop policy recommendations for the Board regarding supervision and regulation of depository institution holding companies and other financial firms supervised by the Board, and shall oversee the supervision and regulation of such firms. The Chairman of the Board, subject to its supervision, shall be its active executive officer. Each member of the Board shall within fifteen days after notice of appointment make and subscribe to the oath of office. Upon the expiration of their terms of office, members of the Board shall continue to serve until their successors are appointed and have qualified. Any person appointed as a member of the Board after August 23, 1935, shall not be eligible for reappointment as such member after he shall have served a full term of fourteen years.
Notes of Decisions
PHH Corp. v. Consum. Fin. Prot. Bureau, 881 F.3d 75 (D.C. Cir. 2018).
· cites it 8× “12 U.S.C. § 242 . The reason is simple: The Federal Reserve must “provide for the sound, effective, 33 and uninterrupted operation of the banking system,” and Congress found that a degree of independence was needed to “increase the ability of the banking system to promote…”
Harry Calcutt III v. FDIC, 37 F.4th 293 (6th Cir. 2022).
“See 12 U.S.C. § 242 (FRB); 12 U.S.C. § 1752a(c) (NCUA Board members serve fixed terms); supra at 6 (FDIC for- cause protections).”
Swan v. Clinton, 100 F.3d 973 (D.C. Cir. 1996).
“12 U.S.C. §§ 242 , 1437, 1812; 15 U.S.C. § 41 ; 49 U.”
James Rocap v. Victor H. Indiek & Fed. Home Loan Mortg. Corp., 539 F.2d 174 (D.C. Cir. 1976).
“§ 309 ; and the Federal Reserve Board, 12 U.S.C. § 242 , 12 C.F.R. § 261 . In short, Congress tailored these provisions to fit most situations, logically relying on the Civil Service Commission for discipline of government employees and on the court for assessment of costs and…”
United States v. Weidner, 692 F. Supp. 968 (N.D. Ind. 1988).
“The Act’s provision for limited removal power by the executive is more circumscribed than some provisions that Congress has deemed appropriate to vouchsafe other agencies’ independence, 12 U.S.C. § 242 (Federal Reserve System’s Board of Governors); 12 U.”
Cook v. Trump (D.D.C. 2025).
· cites it 13× “” 12 U.S.C. § 242 . This case involves the first purported “for cause” removal of a Board Governor in the Federal Reserve’s 111-year history.”
Trump v. Cook (2026).
· cites it 12× “12 U. S. C. §242 . But that does not mean that he may make that decision for any reason, or no reason.”
PHH Corp. v. CFPB (D.C. Cir. 2018).
· cites it 4× “12 U.S.C. § 242 . The reason is simple: The Federal Reserve must “provide for the sound, effective, 33 and uninterrupted operation of the banking system,” and Congress found that a degree of independence was needed to “increase the ability of the banking system to promote…”
Lisa Cook v. Donald Trump (D.C. Cir. 2025).
· cites it 3× “” 12 U.S.C. § 242 . She therefore may not be removed prior to being provided “some kind” of meaningful notice and opportunity to respond.”
In Re Grand Jury Subpoenas (D.D.C. 2026).
· cites it 2× “The FOMC is composed of the Governors of the Federal Reserve Board — who can be removed only for cause, see 12 U.S.C. § 242 — and members from the Fed’s regional reserve banks (like the 3 Federal Reserve Bank of New York), in whose selection the President plays no role.”
Spicer v. Biden (D.D.C. 2021).
“, 12 U.S.C. § 242 6 (allowing removal “for cause by the President”); 15 U.”
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