By
Melissa Quinn
Melissa Quinn
Politics Reporter
Melissa Quinn is a politics reporter for CBSNews.com. She has written for outlets including the Washington Examiner, Daily Signal and Alexandria Times. Melissa covers U.S. politics, with a focus on the Supreme Court and federal courts.
Updated on: September 15, 2025 / 8:42 PM EDT
/ CBS News
Washington — A federal appeals court on Monday rejected a bid from President Trump’s administration to allow the president to fire Lisa Cook from the Federal Reserve Board of Governors, leaving intact a lower court order that reinstated her to the post.
The U.S. Court of Appeals for the D.C. Circuit divided 2-1 in declining to grant the Trump administration emergency relief and clear the way for Mr. Trump to remove Cook from her position. The Trump administration is likely to ask the Supreme Court to intervene. But absent an 11th-hour order from the high court, the decision all but ensures Cook will remain a governor on the seven-member Fed board through a two-day meeting of its interest rate-setting committee, which Cook sits on and is set to begin Tuesday.
Mr. Trump moved to oust Cook from the Fed’s Board of Governors last month over allegations of mortgage fraud. Cook denies any wrongdoing.
Judge Bradley Garcia wrote in a concurring opinion joined by Judge Michelle Childs that Cook is likely to succeed in arguing that Mr. Trump’s attempt to remove her violated her due process rights. Judge Gregory Katsas dissented.
“Given that Cook has a property interest in her position, she is entitled to ‘some kind’ of process before removal,” Garcia wrote. “Before this court, the government does not dispute that it provided Cook no meaningful notice or opportunity to respond to the allegations against her. The government argues only that Cook ‘does not explain what difference a hearing would have made.’ Even accepting that premise, Cook’s entitlement to process stands apart from whether she would succeed in securing a different outcome.”
Garcia added that since Cook has continued to serve in her role despite her purported termination by Mr. Trump, granting the administration’s request for emergency relief would “upend” the status quo.
A Justice Department spokesperson said the agency “does not comment on current or prospective litigation including matters that may be an investigation.”
The Trump administration asked the D.C. Circuit for emergency relief after U.S. District Judge Jia Cobb ruled that Cook’s firing likely violated the Federal Reserve Act and her due process rights.
The Federal Reserve Act specifies that the president can only remove a Fed governor “for cause.” While the term is not defined in the law, Cobb found “for cause” refers to in-office conduct. Because Cook’s alleged misrepresentations on mortgage documents predate her tenure as a Fed governor, Cobb ruled that Mr. Trump lacked “cause” to remove Cook.
The judge issued a preliminary injunction requiring the Fed to allow Cook to remain a member of its Board of Governors during the litigation.
“President Trump’s stated cause refers only to allegations regarding Cook’s conduct before she began serving on the Federal Reserve Board,” the judge wrote in her decision, adding that “such allegations are not a legally permissible cause.”
Mr. Trump has criticized the Fed for moving too slowly in cutting interest rates, though economists expect the central bank will announce a rate cut this week. If Cook’s firing is ultimately allowed — a decision that will likely be made by the Supreme Court — and the president appoints a successor, it would mean he will have appointed the majority of the seven-member Board of Governors.
Mr. Trump announced on social media last month that he was firing Cook, appointed by former President Joe Biden, from the Fed Board of Governors and had “sufficient cause” to oust her. Cook’s 14-year-term on the Fed is set to end in January 2038.
The president cited as grounds for her removal claims made by Bill Pulte, director of the Federal Housing Finance Agency, that Cook made false statements on mortgage documents.
Pulte alleged in a letter to Attorney General Pam Bondi last month that Cook claimed two different properties in Ann Arbor, Michigan, and Atlanta as her principal residence on mortgage documents from 2021 in order to gain more favorable lending terms. Pulte, who was appointed to lead the FHFA by Mr. Trump, has continued to make accusations against Cook related to mortgage documents.
Cook has not been charged with any wrongdoing. Her lawyers said in court papers that she may have “erred” in filling out a form for a private mortgage, but said the events took place before she assumed office as a Fed governor and in her capacity as a private citizen.
“Governor Cook did not ever commit mortgage fraud,” they wrote.
Reuters reported Friday that a loan estimate for the property in Atlanta, dated May 28, 2021, showed that Cook declared that residence as a “vacation home.”
Cook filed a lawsuit challenging Mr. Trump’s effort to fire her, alleging that the move violated the Federal Reserve Act.
While the law does not define “cause,” Cook’s lawyers argued “cause” constitutes what is set out in other laws shielding officials at independent agencies from being fired at-will: instances of inefficiency, neglect of duty or malfeasance in office.
They said Mr. Trump relied on “thinly-veiled pretext” in an effort to oust Cook because she has not supported lowering the benchmark interest rate.
“[T]hose unsubstantiated allegations cannot camouflage the President’s real reason for attempting to remove Governor Cook: he disagrees with her policy decisions,” Cook’s legal team wrote.
The Fed said it is not taking a position on whether Mr. Trump’s attempt to fire Cook is lawful and said it will follow any court orders.
In defending Mr. Trump’s move, Justice Department lawyers have said that Congress gave the president broad discretion to remove a Fed governor for “cause” through the Federal Reserve Act and argued that making “contradictory statements” on financial filings is sufficient ground for removing her.
“When Governors by misconduct or gross neglect erode the foundations of such confidence, the President acts properly and lawfully by removing them,” Justice Department lawyers wrote in a filing to the D.C. Circuit.
They argued that the president’s power of for-cause removal is discretionary, and the exercise of that authority is unreviewable by the courts. Justice Department lawyers also rejected the district court’s conclusion that the public interest in the Fed’s independence weighed in favor of Cook’s reinstatement to her role on the Board of Governors.
“Even with the Federal Reserve’s unique structure and history, its Governors are subject to removal for cause, and the President’s actions to remove Cook based on her misconduct should strengthen, not diminish, the Federal Reserve’s integrity,” they wrote.
Cook is one of several Democratic appointees at independent agencies who have been fired by Mr. Trump since he returned to the White House in January. But her removal is unprecedented, as no president has fired a member of the Fed board in the central bank’s 112-year-history.
Critics of the move have warned that Mr. Trump’s attempt to terminate Cook threatens the independence of the Fed and, if allowed, the stability of markets and the U.S. economy.
Among the other officials Mr. Trump has fired are members of the Federal Trade Commission, Merit Systems Protection Board, National Labor Relations Board and Consumer Product Safety Commission, who have all sued to challenge their firings.
The Supreme Court has allowed the president to oust members of the NLRB, MSPB and CPSC while their cases move forward, but it has drawn a line around the Fed. In a May decision, the high court said the central bank is a “uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”
Melissa Quinn is a politics reporter for CBSNews.com. She has written for outlets including the Washington Examiner, Daily Signal and Alexandria Times. Melissa covers U.S. politics, with a focus on the Supreme Court and federal courts.
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