Federal judge blocks Trump’s attempt to fire Lisa Cook

“The best reading of the ‘for cause’ provision is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a Governor’s behavior in office and whether they have been faithfully and effectively executing their statutory duties,” Cobb wrote.

Trump has accused Cook of committing mortgage fraud by signing documents in 2021 that listed more than one property as her permanent residence. Those mortgages were obtained before President Biden appointed her to the Fed in 2022.

Cook’s lawyer Abbe Lowell said in a statement that Cobb’s decision “recognizes and reaffirms” the Fed’s independence from political interference.

“Allowing the president to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law,” Lowell said.

“President Trump lawfully removed Lisa Cook for cause due to credible allegations of mortgage fraud from her highly sensitive position overseeing financial institutions on the Federal Reserve Board of Governors. This ruling will not be the last say on the matter, and the Trump Administration will continue to work to restore accountability and confidence in the Fed,” said White House Spokesman Kush Desai.

The ruling comes before the Federal Reserve meets next week to vote on cutting the Fed funds rate, which could also lower mortgage rates — a top priority for Trump. Another key vote during that meeting may come from Stephen Miran, Trump’s pick to take the place of Fed Governor Adriana Kugler, who resigned on Aug. 1. The Senate is expected to vote on Miran’s confirmation this week.

Despite Trump’s effort to oust Cook, she has not been charged with any mortgage fraud. Federal Housing Finance Agency (FHFA) Director Bill Pulte sent two criminal referrals to Attorney General Pam Bondi on Aug. 15, which prompted Trump to attempt to dismiss Cook “for cause” on Aug. 25.

Cook has denied that she committed mortgage fraud and filed suit against President Trump on Aug. 28. On Sept. 4, the U.S. Department of Justice (DOJ) began examining whether Cook misrepresented the occupancy of three properties to secure more favorable mortgage terms.

Cook’s lawyers argue Trump’s attempt to fire her was politically driven, pointing to the president’s push to install loyalists at the Fed who would lower interest rates at his direction.

The Federal Reserve declined to comment, and the DOJ responded that “The Department of Justice does not comment on current or prospective litigation, including matters that may be an investigation.”

The National Fair Housing Alliance (NFHA), meanwhile, released a statement applauding Cobb’s decision. “The federal district court’s decision to block President Trump’s unlawful attempt to remove Federal Reserve Governor Lisa Cook is a victory for the rule of law and for the independence of our nation’s most critical economic institution,” said Lisa Rice, president and CEO of the NFHA. “By law, the President does not have the power to fire a Federal Reserve Board Governor without cause. In granting the preliminary injunction, U.S. District Judge Jia Cobb correctly found that the Administration’s claims regarding Governor Cook’s private conduct before taking office are not likely to satisfy this standard.”

Rice continued, “Governor Cook’s historic appointment brought essential expertise and representation to the Federal Reserve. Efforts to undermine her service and smear her are part of a dangerous pattern of political interference that threatens the stability of our economy. NFHA will continue to stand firmly against unlawful attacks on institutional independence and the leaders who serve our country with integrity.”