Supreme Court Appears Skeptical Of Trump’s Bid To Remove Fed’s Lisa Cook

For nearly two hours on Wednesday, the Supreme Court discussed President Donald Trump’s bid to oust Federal Reserve Governor Lisa Cook, who is accused of committing mortgage fraud by allegedly misrepresenting occupancy requirements on loans for two properties.

Several outlets — including The New York Times, CNN, NPR and The Wall Street Journal — reported Wednesday that justices were “skeptical of” and “poised to reject” Trump’s attempts to fire Cook, although no final decision has been made.

The Supreme Court agreed in October to hear Cook’s case and let her stay in her position on the Fed’s board in the meantime. A ruling is expected at the end of June, Reuters reported, adding that multiple justices signaled they are unlikely to lift a lower court order keeping Cook on the job while the case proceeds.

Reuters reported that several justices, including Chief Justice John Roberts, suggested to U.S. Solicitor General D. John Sauer that the allegations against Cook may reflect an inadvertent paperwork error rather than misconduct warranting “for cause” removal, particularly since the conduct occurred before her service at the Federal Reserve.

Justices Amy Coney Barrett and Samuel Alito questioned whether misconduct unrelated to a Fed board member’s official duties could justify removal, with Barrett citing examples such as shoplifting, theft or domestic abuse.

Multiple justices questioned Sauer about Cook not being given notice or a formal opportunity to respond to the allegations before the attempt to fire her.

According to The Wall Street Journal, Cook said after the hearing, Cook that the case “would determine whether the Fed sets interest rates guided by evidence and independent judgment or will succumb to political pressure.”

In early September, the Department of Justice (DOJ) opened an investigation seeking information tied to claims arising from two criminal referrals sent by Federal Housing Finance Agency (FHFA) Director Bill Pulte to Attorney General Pam Bondi. The referrals led Trump to attempt to remove Cook “for cause” on Aug. 25.

The FHFA did not immediately respond to HousingWire‘s request for comment, and the DOJ said it had no comment beyond Sauer’s arguments at the hearing.

Pulte alleges that in 2021, Cook misrepresented properties in Michigan and Georgia as primary residences on mortgage applications to obtain lower interest rates and smaller down payments, despite intending to use them as investment properties.

Cook’s lawyers have argued that as a result of her academic and government roles, her principal residence has shifted over time. The Ann Arbor, Michigan, home refinanced in 2021 remains her primary residence, attorney Abbe David Lowell has stated, even though Cook has not lived there during her tenure at the Fed and plans to return after her term ends.

Lowell has accused Pulte of “cherry-picking” documents and misleading the public and the DOJ by posting incomplete mortgage records on social media.

In a second criminal referral, Pulte alleged Cook improperly listed a Massachusetts condominium as a second home while later reporting rental income. Lowell said Cook refinanced the property in 2021 with bank approval and still spends several weeks there each summer, qualifying it as a second home.

The New Civil Liberties Alliance (NCLA), a nonprofit public interest law firm, issued a statement after the hearing in which it supported Trump’s attempt to fire Cook.

“At today’s argument, the attorneys and Justices wrestled with difficult questions about what ’causes’ can justify the President’s removal of a Federal Reserve Governor, and what procedures the President has to follow, under a federal statute,” said Jacob Huebert, senior litigation counsel for the NCLA.

“But this case should be easy. The Constitution gives all of the federal government’s executive power to the President. That means he must be free to remove anyone else who exercises executive power — including Fed Governors. And that’s why President Trump should win this case.”