Legal experts weighed in Monday night after a federal appeals court handed President Donald Trump a major setback in his effort to remove a Federal Reserve official accused of mortgage fraud.
Lisa Cook, a Federal Reserve governor, was dismissed by Trump over allegations that she claimed two different properties as primary residences on mortgage applications to secure better loan terms.
The administration cited the accusations, brought by Bill Pulte, head of the Federal Housing Finance Agency, as “cause” for dismissal. By law, presidents must show cause to remove a Fed governor. Cook has denied wrongdoing and has not been charged with a crime. Newly released documents also suggest her loan disclosures may not have constituted fraud.
On Monday evening, the D.C. Court of Appeals rejected a Justice Department request to pause a lower court’s order that temporarily blocked Cook’s firing. As a result, she will remain on the Federal Reserve Board — at least for now — ahead of a critical policy meeting scheduled for Tuesday and Wednesday.
The Trump administration is expected to appeal the case to the U.S. Supreme Court. Legal experts say the appeals court ruling has now set the stage for what could become a pivotal high court decision on presidential power and the independence of federal agencies.
Lawrence Hurley, senior Supreme Court reporter for NBC News, commented on Bluesky, “Needless to say, a potentially huge ruling via the Supreme Court’s shadow docket now beckons.”
Jill Wine-Banks, legal analyst for MSNBC and NBC, posted, “Good news. Appeals court won’t let Trump fire Lisa Cook ahead of Fed meeting.” Former federal prosecutor Joyce Vance added on Bluesky, “This may be too quick even for the shadow docket. We shall see.”
Zoe Tillman of Bloomberg wrote on X, “Big tonight: A US appeals court rebuffed President Trump’s latest push to remove Federal Reserve Governor Lisa Cook, with the 2-1 ruling coming hours before the Fed is set to meet tomorrow. Watching to see if DOJ makes a last-minute request for SCOTUS to step in.”
Amanda Fischer, a former SEC chief of staff and congressional adviser, warned on X, “If the Katsas dissent is the playbook for SCOTUS, we’ve basically flattened any difference between for-cause & at will removal. Aka, say hello to a new Fed board with every new President.
The WSJ ed board crowd may have bit off more than they can chew with their legal project.” Politico’s Kyle Cheney summed up the stakes, writing on X, “Trump’s last hope is a quick stay from SCOTUS.”