Trump Attempts to Fire Fed Governor Lisa Cook, Lawsuit Pending
Last week, President Donald Trump tried to fire Federal Reserve Governor Lisa Cook under the pretense of mortgage fraud allegations. Trump said the move was “effective immediately,” however, Cook’s lawyer Anne Lowell revealed that she has sued the Administration and is seeking an injunction from a federal district court to “confirm her status as a member of the Board of Governors.”
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook said, according to Banking Dive. “I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Cook’s conduct in question came from a criminal referral from Bill Pulte, the Federal Housing Finance Agency, to the Justice Department that Cook obtained two mortgages in 2021, two weeks apart, but claimed that both would be used as a principal residence.
The Hill noted that the President has authority to fire members of the Fed board of governors for cause, but it’s unclear whether the allegations against Cook would meet those standards. Additionally, Trump’s move to fire Cook violated her Fifth Amendment right to due process.
Trump’s letter on Cook’s attempted termination was posted to social media without giving her a copy or the chance to respond. Similarly, the criminal referral released by Pulte was done so without notifying Cook, allowing her to respond to allegations ahead of time.
Cook noted that Trump frequently showed disdain for Fed chair Jerome Powell’s refusal to lower interest rates, and said that Trump noticed her track record of voting in agreement with Powell in Federal Open Market Committee policy-setting meetings.
“The President’s concocted basis for removal — the unsubstantiated and unproven allegation that Governor Cook ‘potentially’ erred in filling out a mortgage form prior to her Senate confirmation — does not amount to ‘cause’ within the meaning of the FRA and is unsupported by caselaw,” the attorneys wrote.
An emergency hearing on Friday to determine if she can remain on the Fed’s Board while the lawsuit unfolds concluded without a ruling.
