A federal court judge on Tuesday ruled that embattled Federal Reserve Governor Lisa Cook can remain at her post while she contests President Trump’s efforts to fire her over allegations she committed mortgage fraud.
“At this preliminary stage, the Court finds that Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision,” Washington, DC-based District Judge Jia M. Cobb wrote in her 49-page ruling.
Cobb, an appointee of former President Joe Biden, ordered Federal Reserve Chairman Jerome Powell and the Board of Governors “to allow Cook to continue to operate as a member of the Board for the pendency of this litigation.”
President Trump has removed Federal Reserve Governor Lisa Cook from her position, citing allegations of mortgage fraud. Jeff Kowalsky/Zuma / SplashNews.comThe judge determined that under the central bank’s “for cause” provision, Federal Reserve governors can only be removed “for behavior in office” and for not “faithfully and effectively executing their statutory duties.”
“‘For cause’ thus does not contemplate removing an individual purely for conduct that occurred before they began in office,” Cobb wrote.
The judge also ruled that Trump’s Aug. 25 attempt to fire Cook “likely violated” her Fifth Amendment due process rights and that the governor “demonstrated irreparable harm from her removal.”
Cobb denied the Trump administration’s request to hold off on the injunction pending an appeal.
The ruling is a blow to the president’s efforts to reshape the independent central banks with members more likely to support slashing interest rates.
By replacing Cook, Trump may be able to gain a 4-3 majority on the Fed’s governing board.
The president appointed two board members during his first term and has nominated White House economic adviser Stephen Miran to replace Adriana Kugler, a Fed governor who stepped down last month.
President Donald Trump speaks to reporters before he enters a restaurant near the White House, Tuesday, Sept. 9, 2025, in Washington, to have dinner. APTrump has indicated that he only plans to appoint people to the Fed who will support lower interest rates.
The judge argued that The Federal Reserve Act’s “for cause” provision is “a key part of the statutory scheme protecting the Board of Governors from the naturally ‘coercive influence’ of the power of presidential removal which ‘threatens [its] independence.’”
Trump moved to fire Cook “for cause” after Federal Housing Finance Agency Director Bill Pulte filed a criminal referral with the Justice Department alleging the Fed official had improperly listed two properties — an Atlanta condo and a Michigan home — as her primary residence in 2021.
Pulte has since filed a second referral alleging Cook wrongly listed her Cambridge, Mass. condo as a rental property on government ethics forms but as a “second home” on mortgage documents between 2021 and 2025.
In his termination letter to Cook, Trump argued: “It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both.
“The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks,” the president continued. “The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve.
“In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”
Trump said the documents uncovered by Pulte “at a minimum … calls into question your competence and trustworthiness as a financial regulator.”
Cook responded to Trump’s attempt to fire her by suing the president, arguing that his action was illegal and suggesting that she accidentally “mislabeled” one of her homes as a primary residence on a mortgage application four years ago.
DOJ attorney Yaakov Roth argued in court last month that the erroneous listing of one of Cook’s homes as a primary residence was either “intentional” — and therefore criminal — or negligent, and thus grounds for removal.
Roth also stressed it didn’t matter that the alleged fudging of loan agreements predated the start of Cook’s 15-year Fed term, to which she was confirmed by a narrow 51-47 Senate vote in September 2023.
Cook is a longtime academic and previously served on former President Barack Obama’s White House Council of Economic Advisers and former President Joe Biden’s transition team.
The Fed’s Board of Governors and several Reserve Bank presidents are scheduled to meet to discuss US monetary policy — including potential changes to interest rates — on Sept. 16 and 17 in Washington, DC.
The White House did not immediately respond to The Post’s request for comment.
