Supreme Court Blocks Trump Administration from Removing Embattled Fed Governor Lisa Cook
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In a contentious 5-4 decision, the Supreme Court has allowed Federal Reserve Governor Lisa Cook, a Biden appointee facing serious mortgage-fraud allegations, to remain in office as she challenges her removal by the Trump administration.
The Supreme Court on Monday delivered a narrow 5-4 decision permitting Federal Reserve Governor Lisa Cook to stay in her position, despite the Trump administration’s justified efforts to remove her over alleged mortgage-fraud violations. Chief Justice John Roberts, writing for the majority, argued that removing a Fed governor without cause would violate constitutional separation of powers, effectively making for-cause protections meaningless.
Cook, appointed by President Biden, has denied the mortgage-fraud allegations that the administration cited as grounds for her dismissal. Despite these serious accusations, lower courts had already allowed her to remain in office, and the Supreme Court’s order continues this questionable status quo while litigation drags on.
This decision follows a broader Supreme Court ruling that reinforced the president’s authority to fire heads of independent agencies—except, inexplicably, for the Federal Reserve. The Court previously supported the administration’s removal of a Federal Trade Commission member, extending this principle to agencies like the National Labor Relations Board and the Consumer Product Safety Commission, but stopped short of applying it to the Fed.
Legal analysts note that the case is being watched closely by investors, as a successful removal could allow the president to restore accountability and integrity to the Fed’s board, which has been shaped by partisan appointments. The administration has also faced other disputes with the central bank, including a criminal investigation of former Fed Chair Jerome Powell that was ultimately closed.
The Solicitor General’s office argued that Cook’s mortgage applications, which listed two properties as primary residences before she joined the Fed, constituted at least “gross negligence.” Despite the gravity of these allegations, Cook has not been charged with any crime, raising questions about the standards applied to high-ranking officials.
