The clash between Federal Reserve governor Lisa Cook and President Trump continued on Thursday as Cook filed a lawsuit against the president alleging that his attempt to remove her from her post without a valid reason was illegal.
The lawsuit, which was filed in Washington, D.C., federal district court, challenges an unprecedented move by a president to remove a governor of the independent central bank’s Board without cause.
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On Monday, the president alleged that Cook had submitted fraudulent information on mortgage applications, which came from allegations publicized by Federal Housing Finance Agency Director and Trump appointee Bill Pulte. The criminal referral made by Pulte stated that Cook had purchased two properties in Michigan and Georgia within two weeks of each other and claimed both would be her primary residence on loan applications.
Cook has not been charged with a civil or criminal violation. Her attorneys also filed a motion for a temporary restraining order on Thursday to ensure she remains in her position as a member of the Board and is not denied or obstructed access to “any of the benefits or resources of her Board position” while the court considers the merits of her lawsuit.
The lawsuit complaint, which also names the Board of Governors of the Federal Reserve System and Fed Chair Jerome Powell as defendants, argues that Pulte has been using his office as a platform to launch mortgage fraud allegations against various public officials, and that Cook has simply become the latest target.
The complaint also argues that if Trump were allowed to remove Cook from office, it would violate the Federal Reserve Act (FRA), which requires there be “cause” for a governor’s removal, “which an unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not.”
It also notes that such a move would violate Cook’s Fifth Amendment right to due process and her right to notice and a hearing under the FRA.
“Accordingly, Governor Cook seeks immediate declaratory and injunctive relief to confirm her status as a member of the Board of Governors, safeguard her and the Board’s congressionally mandated independence, and allow Governor Cook and the Federal Reserve to continue its critical work,” the complaint states.
Cook was appointed to the Federal Reserve Board by President Biden in 2022 and has said that she will not resign from her post. The Fed has said that it will follow any court decision in the matter.
On Tuesday, Trump told reporters at the White House that he wants to quickly replace Cook with another appointee, naming his economic advisor Stephen Miran as a possibility. He has also reportedly suggested former World Bank Group President David Malpass, who has criticized the Fed for not lowering interest rates, as another option.
The president’s scrutiny of the Fed has been unwavering since he took office. He has previously threatened to fire Powell and has called for the Fed to lower interest rates on multiple occasions.
See Cook’s complaint below:
