Federal Reserve Board Governor Lisa Cook will stay in her role for now after President Donald Trump attempted to fire her earlier this year. The Supreme Court announced Wednesday that it wants to hear oral arguments in her case in January.
The Trump administration had requested an emergency ruling to block a lower court’s order protecting Cook from dismissal after the president failed not once, but twice, to fire the first Black woman to ever serve on the Federal Reserve Board and reconfigure the central bank to his liking.
The announcement comes after the Supreme Court said on Sept. 22 that it would soon hear oral arguments in the case of Rebecca Slaughter, a commissioner with the Federal Trade Commission whom Trump fired in March. The lower courts ordered Slaughter reinstated after she sued, determining that commissioners could only be fired for neglect of duty or misconduct.
In Slaughter’s case, the justices ruled 6-3 that she could be removed without cause while her case plays out. But they still need to argue on the actual limits of the president’s authority to fire agency commissioners.
In August, Trump became the first president in American history to attempt to fire a sitting Fed board governor. He made the announcement via a letter posted to his social media platform, Truth Social, and claimed that Cook’s removal was for “cause.”
The “cause,” according to Trump, who was himself convicted of 34 felony counts over falsifying documents, involved questions over Cook’s “trustworthiness” from Bill Pulte, the Trump-appointed director of the Federal Housing Finance Agency, after Pulte said he reviewed records suggesting Cook engaged in mortgage fraud.
The Justice Department opened an investigation into Cook in short order.
The administration alleges that in 2021, roughly a year before former President Joe Biden appointed Cook to the governor’s board for the standard 14-year term, she claimed two homes in Michigan and Georgia as her primary residences. Claiming a property as a primary residence is typically a way to secure better loan terms.
Documents first obtained by Reuters in September, however, appear to directly undercut the Trump administration’s allegations against Cook. For example, on a loan form for one of the properties that Pulte and Trump insisted Cook had listed as a primary residence, she had actually listed it as a “vacation home.”
Cook has denied all wrongdoing and has not been criminally charged.
Allegations of mortgage fraud have become a popular cudgel wielded by the president against those he perceives as his enemies or critics. He has accused Sen. Adam Schiff (D-Calif.), who led an impeachment inquiry against Trump during his first term, of mortgage fraud, and he’s also accused New York Attorney General Letitia James, who prosecuted Trump for fraud, of lying about primary residences on loan forms.
While the Trump White House is targeting its opponents with claims of mortgage fraud, it may want to turn an eye inward. ProPublica reported in September that Trump Cabinet members, including Labor Secretary Lori Chavez-DeRemer, Transportation Secretary Sean Duffy and EPA head Lee Zeldin, have described multiple homes as a “primary residence” on financial disclosure forms.
Cook sued the administration and claimed the president had violated the Federal Reserve Act with her removal. Presidents can remove a board governor only “for cause,” and the “cause” claimed by the Trump administration, she said, was not only false but occurred during a time when she wasn’t even on the board, meaning it couldn’t be a relevant reason to oust her.
U.S. District Judge Jia Cobb agreed, and in September, ordered that Cook remain a board governor while litigation continued. Cobb also found that her termination likely violated Cook’s Fifth Amendment right to due process since she was not given any advance notice of her firing and was legally entitled to that procedure as a member of the board.
Cobb also refused a request by the Trump administration to put her ruling on hold while the president appealed to the U.S. Court of Appeals for the District of Columbia. That court sided with Cobb and ruled 2-1 to reinstate Cook while the lawsuit continued.
Notably, the appeals court issued its ruling just two days before the Fed governors met for a critical vote on whether to cut interest rates. The Fed did end up cutting rates by a quarter point.
Trump has insisted that the U.S. economy will suffer if he doesn’t get to personally pick a “majority” of the board’s governors. He has been vocal about his frustrations with the Federal Reserve for months because it will not drastically slash interest rates at the speed he wants.
But with the U.S. job market experiencing a downturn throughout the summer and inflation rising daily, Federal Reserve Chair Jerome Powell has remained cautious even as Trump openly criticizes him as a “knucklehead,” “disaster” and “stubborn MORON.”
The White House did not immediately respond to request for comment Wednesday.