Federal Reserve Governor Lisa Cook has filed a lawsuit against President Donald Trump, challenging his move to remove her from the Board of Governors over allegations of mortgage fraud.
The suit, filed Thursday in federal court in Washington, DC, also names Fed Chair Jerome Powell and the Board of Governors as defendants.
Cook’s attorney, Abbe Lowell, argued that the president’s actions are unlawful.
In the complaint, Lowell said Trump’s attempt represents the first effort in the Fed’s history to oust a governor without proper legal grounds
The filing contends that the Federal Reserve Act requires a showing of cause to remove a governor, and that the allegations raised against Cook do not meet that threshold.
According to Lowell, the claims about mortgage applications submitted before her Senate confirmation are not sufficient to justify dismissal.
The lawsuit explains that Powell and the Fed Board are named only because they could carry out Trump’s removal order.
Within hours of the president’s termination letter being posted on Truth Social, Cook stated that she would continue performing her duties as she has since joining the Fed in 2022.
She became the first Black woman to serve on the Federal Reserve’s Board of Governors in 2022, following her appointment by President Joe Biden.
Her confirmation faced sharp opposition from Republican lawmakers, who accused her of misrepresenting aspects of her resume in an effort to derail her nomination.
Cook denied the allegations and was ultimately confirmed on a party-line Senate vote, with then-Vice President Kamala Harris casting the tie-breaking vote.
Allegations spark political fight
Trump announced Monday that he was removing Cook after allegations surfaced that she had committed mortgage fraud involving two residential properties.
The claims were first raised by Bill Pulte, director of the Federal Housing Finance Agency and a vocal supporter of Trump’s criticism of Powell.
Pulte submitted a criminal referral to the Department of Justice, which has said it will investigate.
The DOJ, along with Pulte and the White House, has called on Cook to step down in light of the allegations.
Cook has not been charged with any crime.
The case is expected to set off a protracted legal fight, potentially ending at the Supreme Court.
The central issue will be whether courts determine that Trump had cause to remove Cook under the provisions of the Federal Reserve Act.
Trump has repeatedly complained that Cook, Powell and other board members have resisted his calls for deeper interest rate cuts.
If successful in removing Cook, Trump would be closer to appointing a majority of the seven-member Fed Board.
At a Cabinet meeting on Tuesday, he said, “We’ll have a majority very shortly. So that’ll be great.”
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