Banking and Finance Law Daily Wrap Up, FEDERAL RESERVE SYSTEM—Trump, administration seek stay of lower court injunction in suit regarding termination of Fed Governor Cook, (Sep 12, 2025)

By Joe Cox, J.D.

In an emergency motion and a response, the parties made clear their disputes on whether Cook should still be able to serve.

With the Federal Open Market Committee (FOMC) slated to meet next week, President Trump filed an emergency motion for an administrative stay and a stay pending appeal of a lower court injunction which prohibited him from terminating Federal Reserve Governor Lisa Cook. Cook has fired back a responsive pleading and the parties are seeking clarification ahead of next week’s FOMC meeting. (Cook v. Trump, No. 25-5326 (D.C. Cir. Sept. 11, 2025)).

History of the Case. On August 25, President Trump posted a letter to Cook in which he declared her removed from the Federal Reserve Board of Governors effective immediately due to a Federal Housing Finance Agency referral to the Department of Justice for prosecution of Cook (see Banking and Finance Law Daily, Aug. 26, 2025). Cook has allegedly signed inconsistent mortgage agreements, misrepresenting her primary residence for the purpose of obtaining better interest rates. These alleged acts occurred before Cook’s 2022 appointment to the Board by President Biden or the Senate’s confirmation of her full 14-year term in September 2023. The Federal Reserve Act states that Governors may be removed only “for cause” by the President.

Cook thus filed suit on August 28th, alleging violations of the Federal Reserve Act and the Fifth Amendment and seeking declaratory and injunctive relief. Judge Jia M. Cobb issued an order on September 9th blocking Cook’s removal and enjoining Fed Chair Jerome Powell and the Board of Governors from treating Cook as removed or obstructing her access to office resources while the case proceeds (see Banking and Finance Law Daily, Sept. 10, 2025). In her ruling, Judge Cobb found that the President’s action likely violated the Federal Reserve Act’s “for cause” requirement and Cook’s due process rights. Judge Cobb held that the statute’s protection limits removal to a Governor’s in-office conduct and performance of statutory duties and does not extend to alleged pre-tenure misconduct. The court also determined that Cook was entitled to notice and an opportunity to respond before removal (See Banking and Finance Law Daily, Sept. 10, 2025).

Current Motion. With the FOMC meeting set for next week, the President sought an emergency order staying Judge Cobb’s ruling before the close of business on September 15th, the day before the FOMC meeting will begin. The President argues that his removal of Cook for cause is an unreviewable matter of discretion, subject at most to ultra vires scrutiny. The President further submits that he had valid cause as the FOMC has substantial financial responsibility and Cook’s alleged actions raise valid questions as to the propriety of her continued service. Finally, the government denies that Cook has any Due Process right in her job position and that the balance of equities favors the government in regard to an action to reinstall a terminated official.

Cook’s Response. Cook filed a response solely addressing the requested administrative stay and indicating an intent to file a separate memorandum in regard to the motion’s full argument. The response argues that an administrative stay is unwarranted here as the government has not identified any interest that would justify disrupting the status quo. Cook indicated that she had continued performing her job duties, which included participation at the FOMC policy meeting, which will include voting on interest rates.

Cook alleges that a stay of her lower court relief would “potentially plunge the FOMC’s vote into turmoil.” Cook distinguishes her case from other administrative stays, in part based on the unique role of the Federal Reserve, which was emphasized by Judge Cobb in her opinion. The response argues, “Preventing the President from wresting control over this country’s independent central bank does not constitute irreparable harm to the Government.”

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

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