Lisa Cook Sues Trump Over Dismissal

Federal Reserve Governor Lisa Cook is taking legal action against President Donald Trump following his decision to dismiss her on August 25.

Cook’s attorney submitted the lawsuit on Thursday in U.S. District Court, Washington, D.C., asserting that Trump’s actions were “unprecedentedly illegal.” This legal move comes after Trump announced on Monday that he was firing Cook due to alleged mortgage fraud.

The lawsuit contends that Cook’s removal challenges what the attorney describes as Trump’s “unprecedented, illegal attempts” to take her out of her position, which they argue is a first in the board’s history. According to the document, Trump’s interpretation of “cause” lacks necessary limitations and could permit him to dismiss any Federal Reserve member who disagrees with him, based on unfounded allegations.

Trump, attempting to justify his actions, reportedly stated that allowing Cook to remain would “destroy the Federal Reserve Act,” as it requires the president to demonstrate “cause” for such dismissals. The lawsuit claims that Cook’s allegations before her Senate confirmation were unfounded.

Earlier on August 20, Trump had called for Cook to resign after Federal Housing Finance Agency Director Bill Prute suggested referring her to the Department of Justice regarding the mortgage fraud accusations.

As stated in the Federal Reserve Act, the president has the authority to remove board members “for cause.” In response to the lawsuit, White House spokesperson Kush Desai reaffirmed that the president exercised his legitimate authority, claiming Cook was accused of misleading financial documents while in a sensitive oversight role.

A spokesperson for the Federal Reserve declined to comment on the situation.