When President Donald Trump announced on August 25, 2025, that he had fired Federal Reserve Governor Lisa Cook, it sent shockwaves through Washington and the financial world alike. No president had ever attempted to unilaterally remove a Fed governor before, thrusting the central bank into unfamiliar and contentious legal territory. The move, which was announced via a letter posted on Trump’s Truth Social account, cited allegations of mortgage fraud as the justification for Cook’s dismissal. Yet, as the dust settled, the story quickly became about much more than one official’s fate—it became a referendum on presidential power, central bank independence, and the rule of law.
Abbe Lowell, a veteran Washington attorney with a storied history representing political heavyweights from both sides of the aisle, wasted no time stepping into the fray. Within days, Lowell filed a lawsuit on Cook’s behalf, challenging the legality of the president’s action and arguing that the allegations against her were both unsupported and irrelevant to her role at the Federal Reserve. "Nothing in these vague, unsubstantiated allegations has any relevance to Gov. Cook's role at the Federal Reserve, and they in no way justify her removal from the Board," Lowell stated on Friday, after Federal Housing Finance Agency director Bill Pulte filed a second criminal referral against Cook with the Justice Department, according to MSNBC.
The legal battle, now playing out in federal court, centers on the meaning of “for cause” removal—a phrase enshrined in the Banking Act of 1935 to safeguard the Fed’s independence from political interference. Cook’s attorneys argue that only Congress and the courts—not the White House—can define what “cause” actually means, and determine if that threshold has been met. In a court filing dated September 2, they asserted, "The government’s argument that the president’s decision to remove a board governor for cause is either unreviewable or entitled to significant deference cannot be squared with the Supreme Court’s reasoning" in a recent ruling upholding for-cause protections for Fed policymakers.
At the heart of the controversy are allegations that Cook claimed two separate properties in Michigan and Georgia as her primary residence, and that she misrepresented the status of a Massachusetts condo to obtain a better mortgage rate. These accusations, first raised by Pulte in an August 15 criminal referral, have not resulted in any criminal charges against Cook, nor has she been provided with details or an opportunity to defend herself, her legal team says. "She did not ever commit mortgage fraud," her attorneys maintain, according to court documents. Instead, they argue, the administration’s actions are part of a broader campaign of political retribution—one that threatens to undermine the very foundations of American economic governance.
Lowell, who recently left the powerhouse firm Winston & Strawn to found his own boutique, Lowell & Associates, is no stranger to high-profile, high-stakes legal fights. Over his decades-long career, he’s represented New York Attorney General Letitia James, Hunter Biden, Jared Kushner, Ivanka Trump, and former Sen. Bob Menendez, among others. Notably, James won a landmark civil fraud case against Trump and his family business in 2023, only to see the penalty overturned the following year. Lowell’s experience with politically charged cases—often involving allegations of government overreach—has given him a familiar playbook as he takes on the Trump administration once again.
"I have basically challenged the overreach of federal agencies in every administration since Ronald Reagan’s," Lowell told NPR’s "Morning Edition" last month. "Didn’t matter whether it’s a Democratic or Republican administration. If the government overreaches, then [the] lawyer’s job is to put the government in the right place." But, he added pointedly, "The difference with the Trump administration is that the White House overreaches over and over again. So I guess the bottom line is this is consistent with what I and the people I’m working with have always done. There’s just more of it to do."
The administration, for its part, maintains that the president has "broad discretion" to remove a Fed governor for cause. In court filings, government attorneys argued that Trump gave Cook notice of the mortgage allegations and waited five days for her response before proceeding with the termination. They contend that Cook has not offered any substantive defense to the accusations, and that the president’s decision should stand. The case, which was heard by U.S. District Judge Jia Cobb on August 29, ended without an immediate ruling. Judge Cobb gave Cook’s attorneys until September 2 to bolster their arguments, with the government’s supplemental brief due by September 4.
The implications of the case go far beyond the fate of one central banker. More than 590 economists have signed a public letter warning that the administration’s move "threatens the fundamental principle of central bank independence and undermines trust in one of America’s most important institutions," as reported by NBC. The letter emphasizes that any allegations against a Fed official "should be adjudicated through established legal channels, with transparency and fairness, to preserve trust in America’s economic stewardship." Weakening the "for cause" standard, they argue, would inject political risk into monetary policy, potentially raising interest rates and costs for families and businesses.
Lawmakers and public figures have also weighed in. California Rep. Ro Khanna, a Democrat, told NBC’s "Meet the Press" that Trump’s attempt to remove Cook threatens the Fed’s independence, though he urged Cook to release her mortgage documents to the public. Meanwhile, Pulte, the Trump ally and housing agency director at the center of the allegations, has continued to press his case in the media. Appearing on Fox Business, he complained that Cook is "not coming out and denying it. Instead, she’s doing double speak with her attorneys and trying to play all kinds of games and attack us as the investigators."
The controversy has also drawn parallels to other recent firings and investigations. Lowell, for example, added former CDC director Susan Monarez as a client last week after she was dismissed from her role for what he describes as political reasons. In his view, the Trump administration’s actions represent a dangerous escalation in the use of government power to target perceived adversaries. "I know we get inured to the excess of authority that is happening in the last six months, but this strikes at such—the heart of the rule of law that people should pay attention," Lowell said, according to NPR.
As the legal battle grinds on, the stakes remain high for both the Federal Reserve’s independence and the broader principle of checks and balances in American government. The outcome will likely set a precedent for how far a president can go in reshaping independent agencies—and how much protection officials like Lisa Cook truly have from the shifting winds of politics. For now, all eyes remain on the courtroom, where the next chapter in this unprecedented saga is set to unfold.
