Federal Reserve Gov. Lisa Cook Sues Trump Over Attempted Firing

By Matt Cohen

FILE – Lisa Cook, nominee to be a member of the Federal Reserve Board of Governors, speaks during the Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Thursday, Feb. 3, 2022, in Washington. On Tuesday, May 10, 2022, the Senate confirmed economist Cook to serve on the Federal Reserve’s board of governors, making her the first Black woman to do so in the institution’s 108-year history. (Ken Cedeno/Pool Photo via AP, File)

Federal Reserve Governor Lisa Cook is suing President Donald Trump to keep her job, after the president earlier this week tried to remove her.

On Monday, Trump sent a letter to Cook removing her from the Board of Governors of the Federal Reserve System, “effective immediately.” In his letter, the president said he was exercising his authority under the Federal Reserve Act (FRA), which grants the executive the power to remove a governor from the Federal Reserve for sufficient cause. 

Cook’s lawsuit argues that Trump did not show that sufficient cause exists. Trump cited allegations that Cook signed mortgage documents claiming two different homes as her “primary residence” in the same year, calling it “deceitful and potentially criminal conduct.”

No court has ruled on those claims, which were dug up by William Pulte, a Trump ally who heads the Federal Housing Finance Agency, and Cook has not been charged with any crime.

“President Trump did not purport to remove Governor Cook for ‘inefficiency, neglect of duty, or malfeasance in office,’ or for any actions that were carried out in the course of other official duties,” the lawsuit reads. “Instead, the letter purporting to fire Governor Cook refers only to the fact that she ‘may have made false statements on one or more mortgage agreements’ in her personal capacity four years ago, before she was a Governor. This allegation about conduct that predates Governor Cook’s Senate confirmation has never been investigated, much less proven.”

Such an allegation is not grounds for removal under the FRA, the lawsuit argues. 

“The President’s actions violate Governor Cook’s Fifth Amendment due process rights and her statutory right to notice and a hearing under the FRA,” the lawsuit states.

Federal Reserve governors are appointed to 14-year terms, specifically to assert their independence from executive power over the central bank and insulate them from political pressure. Trump’s unprecedented attempt to remove Cook from her position challenges the board’s independence. 

If the firing is allowed to occur, it would be the first time in the board’s 100-plus year history that a president has fired a sitting board governor. 

“It is clear from the circumstances surrounding Governor Cook’s purported removal from the Federal Reserve Board that the mortgage allegations against her are pretextual, in order to effectuate her prompt removal and vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve,” the lawsuit states.