NextFin news, On Thursday, September 18, 2025, the Trump administration filed a petition with the U.S. Supreme Court seeking to overturn federal court decisions that have prevented President Donald Trump from firing Lisa Cook, a member of the Federal Reserve Board of Governors. The move comes amid allegations that Cook committed mortgage fraud prior to her appointment to the Fed.
President Trump announced on August 25, 2025, his intention to remove Cook from the seven-member Federal Reserve Board, citing accusations that she made contradictory statements on mortgage applications for two properties in Michigan and Georgia, each claimed as her primary residence. Trump characterized this as deceitful and potentially criminal conduct, asserting it demonstrated a lack of fitness to serve on the central bank's board.
Cook has denied the allegations and challenged her removal in federal court. On September 9, 2025, U.S. District Judge Jia Cobb issued a preliminary injunction blocking the firing, ruling that the Federal Reserve Act permits removal of governors only "for cause" related to conduct during their tenure, and that Cook’s alleged misconduct occurred before her appointment. The judge also found that Cook likely has a property interest in her position, entitling her to due process protections under the Fifth Amendment.
The Trump administration appealed the injunction, but the U.S. Court of Appeals for the D.C. Circuit, in a 2-1 decision, declined to stay the injunction, allowing Cook to remain on the board and participate in Federal Reserve meetings, including the recent September policy meeting where the Fed cut interest rates by 0.25%.
In its Supreme Court filing, the Justice Department, led by Solicitor General D. John Sauer, argued that the lower courts improperly interfered with the President’s constitutional authority to remove executive officers for cause. The filing contends that Cook does not have a protected property interest in her position and that the President’s determination of cause is not subject to judicial review. The administration also criticized the district court’s reinstatement order as beyond judicial authority.
The case raises significant questions about the balance of power between the executive branch and the judiciary, as well as the independence of the Federal Reserve. The Federal Reserve Board of Governors, created by Congress in 1913, is designed to be insulated from political pressures, with members serving staggered 14-year terms and removable only for cause.
Lisa Cook was nominated by then-President Joe Biden in 2023 and confirmed by the Senate. The Trump administration’s challenge to her tenure is unprecedented in recent history and could reshape presidential authority over independent federal agencies.
The Supreme Court has not yet ruled on the petition. Meanwhile, Cook continues to serve on the Federal Reserve Board and participated in the recent Federal Open Market Committee meeting, where she voted in favor of the interest rate cut.
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