Banking and Finance Law Daily Wrap Up, FEDERAL RESERVE SYSTEM—Trump launches Cook removal inquiry at Fed over mortgage allegations, (Oct 9, 2026)
Law Firms Mentioned:Lowell & Associates, PLLC
The inquiry is the latest action by Trump to remove Cook from the Fed following a rebuke by the Supreme Court.
President Donald Trump has issued a Presidential Memorandum establishing a committee of inquiry to determine whether cause exists to remove Federal Reserve Governor Lisa Cook based on allegations that she made false statements in connection with one or more mortgage instruments. The Oct. 7, 2026, action renews an effort that began when the White House told Cook the President was considering removal because it asserted there was sufficient reason to believe she had made false mortgage statements (see Banking and Finance Law Daily, Aug. 26, 2025).
The committee of inquiry, which is to be comprised of the Assistant to the President for Economic Policy, the Chairman of the Equal Employment Opportunity Commission, and the Director of the Office of Government Ethics, will investigate and report under the Federal Reserve Act and hold an in-person White House hearing on November 5. The October 7 memorandum does not find that Cook made false statements.
The new committee of inquiry creates a formal process after the U.S. Supreme Court refused to lift an injunction preventing Cook’s removal. In a 5-4 opinion by Chief Justice John Roberts, the Court based its narrow determination on the lack of statutory procedural protections for Cook to dispute the charges (see Banking and Finance Law Daily, June 29, 2026). A district judge had entered the preliminary injunction after concluding that removal likely violated the Federal Reserve Act’s for-cause limit because the asserted basis concerned pre-appointment conduct rather than Cook’s performance in office, while separately finding that her 14-year term created a property interest carrying due-process rights to notice and an opportunity to respond (see Banking and Finance Law Daily, Sept. 10, 2025).
In early August 2026, the White House informed Cook that “the President is considering removing you from your position” after the Supreme Court rendered its decision. The basis, according to a letter to Cook signed by Daniel Scavino, assistant to the president and deputy chief of staff, was that there is “sufficient reason to believe you made false statements on one or more mortgage agreements” (see Banking and Finance Law Daily, Aug. 10, 2026).
On Aug. 26, 2026, attorney Abbe David Lowell submitted Cook’s response to White House Counsel David Warrington regarding the earlier notice of potential removal. Cook denied committing mortgage fraud or intentional wrongdoing, and counsel argued that no legally cognizable cause existed to remove her from the Board. She characterized her signing of a form that classified an Atlanta property as primary as an inadvertent oversight and said her financing inquiry began on the lender’s website as a request for information about a vacation-home mortgage. The response attached a declaration from Suffolk University Law School Professor Kathleen Engel, who concluded that the two occupancy provisions were insufficient to establish noncompliance with lender requirements, favorable terms based on a false statement, or mortgage fraud. Counsel also relied on Trump v. Cook’s description of cause as a “substantial threshold” that must reflect the Federal Reserve’s unique historical status and role.
By establishing the committee of inquiry and charging it with developing findings of fact and conclusions of law for the President; and providing evidence disclosure, a hearing, and written submissions, the memorandum supplies procedures that were absent when the Supreme Court considered the earlier stay request.
The November 5 hearing will take place at the White House and may last no more than four hours. Cook may submit a written position statement if the committee receives it at least three days beforehand. Before the hearing, the committee must give her the evidence it is considering, and she may present argument, written evidence, and written witness statements. The hearing will be closed to the public but transcribed. Cook may submit a post-hearing written statement by November 10.
As soon as practicable after receiving any post-hearing statement, the committee must send the President written findings of fact and conclusions of law and recommend whether cause exists to remove Cook from the Federal Reserve Board.
Attorneys: Abbe David Lowell (Lowell & Associates, PLLC) for Lisa D. Cook
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