Federal Reserve Governor Lisa Cook Sues Trump over Disputed Removal for Alleged Mortgage Fraud
Federal Reserve Governor Lisa Cook has filed a lawsuit against President Trump, contesting his attempt to remove her from office. The legal action was anticipated, given Cook’s earlier statements that she would not resign and her questioning of the president’s authority to dismiss her.
In a recent tweet, Trump announced his decision to dismiss Cook, citing allegations from a Trump associate accusing her of providing false information on a mortgage application. This action is part of Trump’s ongoing efforts to influence the Federal Reserve and Chair Jerome Powell to lower interest rates more rapidly.
Cook’s lawsuit, filed in a federal court in Washington D.C. on Thursday, contests the president’s attempt to terminate her tenure. The complaint argues that the president’s reasoning—that Cook made false statements on mortgage agreements—is based on an unsubstantiated claim concerning private applications submitted prior to her confirmation as governor.
Under federal law designed to shield the central bank from political influence, Fed governors can only be removed for cause.
In a letter to Cook, Trump stated, “Given your alleged dishonest and potentially criminal conduct in a financial matter, I no longer have faith in your honesty.”
Cook’s legal action asserts that her dismissal infringes upon her due process rights and the Federal Reserve Act. The complaint suggests that the allegations are a pretext to swiftly vacate her seat for Trump to appoint a successor and further his agenda aimed at undermining the Fed’s independence.
White House spokesman Kush Desai stated on Thursday that the president has lawfully exercised his authority to remove a Fed governor for cause, due to credible accusations of financial misconduct in a sensitive position overseeing financial institutions.
Earlier this month, Federal Housing Finance Agency director Bill Pulte, a close Trump ally, accused Cook of mortgage fraud. Pulte cited two home loans obtained by Cook weeks apart in 2021, before joining the Federal Reserve. The properties were located in Michigan and Georgia. Pulte claimed that Cook had declared each property as her primary residence—a declaration typically resulting in more favorable loan terms.
Cook seeks the court’s confirmation of her status as a member of the board of governors, protection of the board’s congressionally mandated independence, and the continuation of her work with the Federal Reserve. The lawsuit names Trump, the board of governors of the Federal Reserve, and Powell, should he have any ability to enforce Trump’s purported termination of Cook.