Judge Weighs Request to Block Trump’s Firing of Fed Governor Lisa Cook

The president said he would fire Cook after allegations she lied on mortgage forms in 2021, but she says it’s because he wants more control over the Fed.

Lisa Cook testifies during a Senate Banking nominations hearing in Washington on June 21, 2023. Photo by Drew Angerer/Getty Images

WASHINGTON—U.S. District Judge Jia Cobb said on Aug. 29 that she will weigh a request to temporarily block President Donald Trump’s firing of Federal Reserve Governor Lisa Cook, as both sides in the lawsuit consider an expedited hearing schedule over the weekend.

Trump recently said Cook should resign after Federal Housing Finance Agency Director William Pulte accused her of falsifying mortgage applications to secure lower interest rates.

When Cook did not resign, Trump said he would fire her.

Cook then sued to prevent her removal. Her lawsuit alleged that the Federal Reserve Act says Trump could not fire her without first showing cause and giving her a hearing.

“An unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation” was not enough, her lawsuit said.

On Aug. 25, Trump posted a letter he’d written to Cook on his Truth Social page, which informed her that she was being fired over the allegedly dishonest statements on previous mortgage applications.

In 2021, Cook had listed a Michigan property as her primary residence for the upcoming year on a mortgage application, but listed a Georgia property as her primary residence two weeks later.

The contradiction was “deceitful and potentially criminal,” Trump’s letter said.

At the very least, it demonstrated “gross negligence” in financial affairs, which disqualified Cook for the job, Trump wrote.

Legal arguments in Friday’s hearing turned on whether or not Trump had “cause” to fire Cook.

Abbe Lowell, attorney for the plaintiff, said the mortgage irregularity was just a pretext to fire her, so the president could appoint a new governor more amicable to lowering interest rates.

Cobb asked Lowell if, hypothetically, such allegations were true, would that be sufficient cause for Trump to fire someone.

Lowell said that the question was tricky, but that under certain circumstances that did not apply to his client’s situation, the answer would be yes. Lowell also noted that Cook had not really been given advance notice that she would be fired.

Yaakov Roth, an attorney for the government, said she was given notice because she was aware of the social media posts. Cobb seemed skeptical that this was sufficient notice.

Roth also pointed out that Cook still has not given an explanation for the mortgage discrepancy.

The Department of Justice has not yet charged Cook with a criminal offense.

The legal dispute comes amid Trump’s criticism of the Federal Reserve’s monetary policy and its chair, Jerome Powell. Trump’s previous decisions to remove agency heads have already been the subject of legal scrutiny during his second term in office.

In May, the Supreme Court allowed the president to fire National Labor Relations Board Chair Gwynne Wilcox and Merit Systems Protection Board Chair Cathy Harris, overruling lower court decisions that had blocked their removal.