"This lawsuit challenges president Donald Trump's unprecedented and unlawful attempt to remove governor Lisa Cook from office. If successful, it would be the first such instance in the history of the Federal Reserve Board (Fed)", Cook's lawyers stated in a 24-page complaint filed with the federal court in Washington today.
Cook seeks a court ruling affirming her status as a Fed governor, allowing her to continue her duties.
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President Trump (left) and Lisa Cook. Photo: Reuters |
President Trump (left) and Lisa Cook. Photo: Reuters
This action follows president Trump's 25/8 announcement of Cook's immediate dismissal. He cited the reason for his decision as a criminal referral alleging "mortgage fraud" sent to the Justice Department on 15/8 by the director of the Federal Housing Finance Agency (FHFA), Bill Pulte.
Pulte alleges that Cook listed an Atlanta, Georgia apartment as her primary residence while simultaneously securing a mortgage for a Michigan home, claiming it as her main residence. This occurred in 2021, a year before Cook's Senate confirmation as a Fed governor.
Cook's lawsuit argues that an unsubstantiated allegation concerning actions prior to her taking office does not constitute "just cause," and warns of the ramifications should the court rule in Trump's favor.
"Allowing a president to remove a Board of Governors member due to policy disagreements would undermine the Fed's independence", the lawsuit states. This independence is crucial for ensuring US economic stability, "as a president's short-term political interests often conflict with monetary policy".
President Trump has not yet commented on the news. On 26/8, Trump stated he was prepared for a legal battle. The Fed announced the same day that they would abide by the court's decision should Cook file suit.
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US president Donald Trump at the White House on 25/8. Photo: AFP |
US president Donald Trump at the White House on 25/8. Photo: AFP
The Fed's Board of Governors consists of seven members appointed by the US president and confirmed by the Senate. Each member serves a 14-year term and cannot be reappointed. The Federal Reserve Act of 1913, which established the Fed, stipulates that a president can dismiss a governor for "just cause".
Tension between president Trump and the Fed has escalated as he seeks interest rate cuts to stimulate the economy, a move the Fed hasn't accommodated. He has repeatedly attacked and even threatened to fire Fed chair Jerome Powell.
Cook is one of three governors appointed under former president Joe Biden. Two of the remaining governors were chosen by Trump. If Cook resigns or is removed, Trump could appoint a replacement, ensuring a majority of the Fed's Board of Governors shares his views on monetary policy.
Nhu Tam (According to AFP, Reuters)
