President Trump issued an order claiming to fire Federal Reserve Governor Lisa Cook for cause based on an unprosecuted criminal referral about her 2021 home purchases. Governor Cook refused to resign, filed a lawsuit to block the removal, and asserted that Trump lacks authority to remove her. The complaint names Fed Chair Jerome Powell and the Board of Governors only insofar as they might effectuate the removal. The suit asks the court to void the removal order, affirm Cook's status, and rule that the mortgage allegations do not meet the statutory standard of cause. Cook's term runs through 2038.
This case challenges President Trump's unprecedented and illegal attempt to remove Governor Cook from her position, which, if allowed to occur, would be the first of its kind in the Board's history. It would subvert the Federal Reserve Act (FRA), which explicitly requires a showing of cause for a Governor's removal, which an unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not.
Cook, a Biden-era appointee, announced her plans to sue Trump earlier this week, arguing that there is no cause. In a statement to CNN on Monday night, Cook said: President Trump purported to fire me for cause' when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.
The lawsuit states that both are being sued only to the extent that they can effectuate President Trump's purported termination of Governor Cook. Trump has cited a criminal referral from Federal Housing Finance Agency (FHFA) Director Bill Pulte to Attorney General Pam Bondi over Cook's 2021 purchases of homes in Michigan and Georgia as cause for Cook to be fired.
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