A federal judge Tuesday night temporarily blocked President Donald Trump’s effort to remove Lisa Cook from the Federal Reserve Board of Governors.
Trump tried last month to fire Cook, citing allegations of mortgage fraud as “sufficient cause” for the unprecedented move. It was the first time a president has tried to fire a member of the central bank, and critics have warned that the move could upend the Fed’s political independence.
A president can only remove a Fed official “for cause,” generally understood to mean professional wrongdoing, and not over routine policy disagreements. Though the Justice Department is reportedly probing the mortgage fraud allegations against Cook, she has not been charged with or convicted of a crime and the alleged violation took place before her appointment to the Fed in 2022.
“[A]t 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,” U.S. District Judge Jia Cobb wrote in the opinion.
Abbe Lowell, Cook’s lawyer, said in a statement that the “ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal 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.
Trump filed a widely anticipated appeal Wednesday afternoon. Before the appeal was filed, White House spokesperson Kush Desai doubled down on Cook’s firing in a statement to NOTUS.
“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,” Desai said. “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.”
Trump tried to fire Cook after Bill Pulte, the director of the U.S. Federal Housing Finance Agency, accused the Fed governor of mortgage fraud for claiming two properties as her primary residence. Pulte has used his sizable social media presence to fan the flames, saying, “No one is above the law.”
Three other members of Trump’s Cabinet have made similar claims on loan documents, ProPublica reported last week, citing real estate experts who said this is “often legal and rarely prosecuted.”
The judge’s decision does not directly address the allegations of mortgage fraud, but rather the president’s authority to fire Cook.
Trump previously told reporters he would “abide by the court.”
The ruling means Cook will be able to vote when a board of Fed officials meets later this month. The Fed is expected to cut interest rates for the first time since Trump took office, something the president has been pushing for publicly for months.
“The public interest in Federal Reserve independence weighs in favor of Cook’s reinstatement,” Judge Cobb added. “That independence is critical in helping the nation’s ‘banking system to promote stability.’”
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This article has been updated with a statement from the White House and news of Trump’s appeal.