Federal Reserve Board Governor Lisa Cook filed a lawsuit against President Donald Trump on Thursday, seeking to block his effort to remove her from the position. The legal action, filed in federal court in Washington, D.C., also names Federal Reserve Chairman Jerome Powell and the board of governors as defendants.
Trump announced on Monday that he intended to remove Cook due to allegations of mortgage fraud related to two residential properties she owns.
In the lawsuit, Cook’s attorney, Abbe Lowell, argues that the president’s move is both unprecedented and illegal. “This case challenges President Trump’s unlawful attempt to remove Governor Cook, which, if allowed, would mark the first such action in the Federal Reserve’s history,” Lowell stated.
He added that the Federal Reserve Act requires a valid “cause” for removing a governor and that unsubstantiated allegations concerning private mortgage applications submitted before Cook’s Senate confirmation do not meet that standard.
“The President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions,” White House spokesman Kush Desai said in a statement on Thursday. “The removal of a governor for cause improves the Federal Reserve Board’s accountability and credibility for both the markets and American people.”
Trump on Tuesday announced on the Truth Social platform removing Cook from the bank’s board of governors. “I have determined that there is sufficient cause to remove you from your position,” Trump said in the letter.
The US president had called on Cook to resign on August 20, over allegations of two of her mortgages as primary residences by US Federal Housing Finance Agency Director William Pulte, who was appointed by Trump.
“At minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” Trump wrote.