Banking and Finance Law Daily Wrap Up, FEDERAL RESERVE SYSTEM—Fed’s Cook challenges President Trump’s attempted removal, seeks emergency court order, (Aug 28, 2025)

By Shashi Kant, BALLB, LLM.

Cook’s complaint cites Federal Reserve Act protections and due-process violations in the dispute over the central bank’s independence.

Federal Reserve Board Governor Lisa Cook filed a complaint in the U.S. District Court for the District of Columbia against President Donald Trump, the Board of Governors of the Federal Reserve System, and Chair Jerome Powell. The filing challenges the President’s Aug. 25, 2025, Truth Socialpost declaring that he had removed Governor Cook from office. According to the complaint, the President’s action violates the Federal Reserve Act and the Fifth Amendment. In connection with the complaint, Governor Cook requested an emergency hearing and a temporary restraining order to prevent the Board of Governors or the Fed Chair from implementing or recognizing the President’s declaration (Cook v. Trump, No. 1:25-cv-02903 (D.D.C. Aug. 28, 2025)).

The complaint. The complaint names Governor Cook as plaintiff in both her official and personal capacity. The defendants are President Trump, the Board of Governors in both their collective and individual official capacities, and Fed Chair Jerome Powell. Governor Cook argues that the removal announcement was unlawful on two grounds. First, the Federal Reserve Act provides that Governors may only be removed “for cause,” and the President’s action, which was premised on allegations of mortgage irregularities, did not meet that standard. Second, the process by which the President acted violated her due process rights, as she received no notice of the allegations or an opportunity to respond before being removed publicly on social media.

Background. The complaint situates the controversy in the history of the Federal Reserve Act. It explains that Congress designed the Board of Governors to function independently of the White House. This independence was reinforced by statutory provisions, including long, staggered terms for Governors and a “for cause” removal restriction. The filing cites Supreme Court precedents which upheld restrictions on presidential removal powers for independent agency members. It also points to the court’s recent decision in Trump v. Wilcox (605 U. S. ____ (2025)), which distinguished the Fed’s structural safeguards and emphasized its unique role as an independent central bank.

The complaint recounts the sequence of events leading up to the President’s announcement. On Aug. 15, 2025, Federal Housing Finance Agency Director William Pulte referred Governor Cook to the Department of Justice, alleging that she misrepresented her primary residence in mortgage filings in 2021. On Aug. 20, 2025, Pulte publicized the referral letter. That same day, President Trump posted on Truth Social demanding Cook’s resignation. On Aug. 22, 2025, he told reporters he would fire her if she did not resign. On Aug. 25, 2025, he posted a letter to Truth Social declaring her removal “effective immediately.” Governor Cook asserts that she first learned of the alleged firing through the President’s social media post and had no prior notice or opportunity to respond (see Banking and Finance Law Daily, Aug. 26, 2025).

Request for emergency hearing. Alongside the complaint, Governor Cook filed a motion for a temporary restraining order and a memorandum in support of it. Cook is asking the court to declare the President’s removal attempt unlawful, confirm her continuing status as a member of the Board of Governors, and enjoin the Fed and Chair Powell from enforcing or recognizing the President’s action. Her counsel argued that the situation required emergency relief due to the irreparable harm that would result from recognizing the purported firing.

The motion applies the established test for injunctive relief. It argues that Governor Cook is likely to succeed on the merits because the Federal Reserve Act’s “for cause” removal provision does not cover the allegations cited by the President. The mortgage referral concerned alleged private conduct that occurred before her confirmation and was never substantiated. Even if such allegations could constitute “cause,” the President did not provide any notice or a hearing, as required by the Fifth Amendment and the Act.

The motion also argues that Governor Cook faces irreparable harm, as her Senate-confirmed position and ability to perform her duties in promoting employment and price stability would be jeopardized. The balance of equities, according to her counsel, weighs in her favor, as preserving the independence of the Fed does not burden the defendants. The public interest is also invoked, as recognition of the President’s unilateral removal would undermine the credibility and independence of the Federal Reserve System.

Broader context. In her filings, Governor Cook situates the dispute within President Trump’s broader conflict with the Fed. The memorandum recounts that since January 2025 the President has repeatedly pressured Chair Powell and other Fed Governors to lower interest rates, including those through Truth Social posts and public remarks threatening Powell’s removal. The filings state that Governor Cook consistently voted with Chair Powell at Federal Open Market Committee meetings in 2025 to maintain existing rates. According to the complaint, her removal attempt should be understood as a direct escalation of these disputes and as retaliation for her monetary policy positions, rather than as a lawful exercise of presidential authority.

Attorneys: Abbe David Lowell (Lowell & Associates, PLLC) for Lisa D. Cook.

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