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Thusday, August 28, 2025
News Alert: Fed Governor Lisa Cook files lawsuit challenging Trump’s attempt to fire her
Federal Reserve Governor Lisa Cook is suing to keep her job on the prominent board after President Donald Trump said he was removing her from her role earlier this week.
On Monday, Trump posted on social media a letter addressed to Cook informing her that he had sufficient “cause” to fire the central bank official. The letter cited accusations of mortgage fraud first raised by Federal Housing Finance Agency Director Bill Pulte.
Cook has not been charged with any wrongdoing. Her lawsuit now sets the stage for what could be a high-stakes legal battle with major implications for the Fed and the power of the presidency.
Fed Governor Lisa Cook sues to challenge Trump’s attempt to fire her, setting up a showdown over presidential power
By
Bryan Mena,
Katelyn Polantz
Updated 1 min ago (August 28,2025)
Washington
—
Federal Reserve Governor Lisa Cook is suing to keep her job on the prominent board after President Donald Trump said he was removing her from her role earlier this week.
Cook’s lawsuit, filed Thursday morning, asks for a judge to rule that Trump’s attempt to remove her is unlawful and that she remains an active member of the Federal Reserve.
Cook’s lawsuit now sets the stage for what could be a high-stakes legal battle with major implications for the Fed and the power of the presidency, even as Trump moves to consolidate his hold over parts of the government once considered sacrosanct and free from political influence.
On Monday, Trump posted on social media a letter addressed to Cook informing her that he had sufficient “cause” to fire the central bank official. The letter cited accusations of mortgage fraud first raised by Federal Housing Finance Agency Director Bill Pulte.
Trump and his allies have accused Cook of mortgage fraud involving two properties she owns, both of which she appears to have designated her principal residence. The Trump administration has said it is investigating other perceived political opponents of the president for alleged mortgage fraud, including New York Attorney General Letitia James and Sen. Adam Schiff of California.
The Justice Department has said it plans to investigate Pulte’s allegations. Cook has not been charged with any wrongdoing.
Cook is also asking the court to declare that “an unsubstantiated allegation of mortgage fraud prior to a Governor’s confirmation is not cause for removal” under federal law.
Cook’s situation may be legally complicated around her dismissal, given Trump’s belief he can fire her for cause even if allegations are unproven and an investigation isn’t complete.
The 24-page complaint, filed at a federal court in Washington, DC, accuses Trump of using fraud allegations in an attempt to end-run federal law intended to protect her from such interference by the president.
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“It is clear from the circumstances surrounding Governor Cook’s purported removal from the Federal Reserve Board that the mortgage allegations against her are pretextual, in order to effectuate her prompt removal and vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve,” Cook’s attorneys wrote in the lawsuit.
The case has not yet been assigned to a judge in DC.
“This is a big case,” said Jane Manners, an associate professor at Fordham School of Law who researches presidential power. “If we’re going to allow politics to determine the membership of the Fed, what does that mean for the future of our economy?”
Several other quasi-independent federal government officials have been unsuccessful in holding on to their positions, despite their emergency lawsuits.
The Supreme Court, in 6-3 votes from a conservative-leaning bench, has repeatedly allowed Trump to fire leadership of independent government agencies this year. However, the court has drawn a line in the past around the Fed. In May, the court called the Federal Reserve a “uniquely structured” agency with a long history of insulation from political interference from the White House that shouldn’t be changed.
At a Cabinet meeting on Tuesday, Trump said he’s prepared for a legal fight to defend his attempt to oust Cook.
A court would have the power to say whether Cook can continue serving in her role now or must step aside until the legal proceedings are resolved in a fuller way later.
The Fed said in a statement on Tuesday it will abide by a court’s decision in Cook’s challenge of her attempted firing.
“Lisa Cook has indicated through her personal attorney that she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities as a Senate-confirmed member of the Board of Governors of the Federal Reserve System,” the Fed said.
The president has the power to fire any Fed governor for cause, but it’s unclear whether unproven allegations meet that threshold.
The president has blamed the Fed’s leadership for moving too slowly, in his view, to lower interest rates.
If Cook is allowed to remain a Fed governor, without any restrictions, she’ll be able to vote at the Fed’s upcoming September 16-17 meeting. Fed policymakers are widely expected to deliver the first interest rate cut since December, according to futures.
Cook hasn’t publicly spoken about the economy since Pulte raised accusations of mortgage fraud against her. Her latest comment on the economy was after the release of the July jobs report on August 6 during a moderated discussion hosted by the Boston Fed.
She said that the weak streak of job growth in recent months was “concerning” and that the labor market could be at a turning point.
This story is developing and will be updated.
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