Federal Reserve governor Lisa Cook has sued President Trump, who had ordered her removal from office.
The suit was widely expected, because Cook had already said she would not resign and had questioned the president's authority to fire her.
In a social media post earlier this week, Trump said he was dismissing Cook in response to allegations from a Trump ally that she had made false statements on a mortgage application. It's Trump's latest attack on the Fed as he tries to pressure the central bank and Chair Jerome Powell to lower interest rates more quickly.
Cook's complaint, which was filed Thursday in federal court in Washington, D.C., is challenging the president's attempt to remove her from office. Her lawsuit argues that his rationale — that she made false statements on mortgage agreements — is based on "an unsubstantiated allegation" about private applications she submitted prior to Senate confirmation as governor.
Under federal law designed to insulate the central bank from political pressure, Fed governors can only be removed for cause.
Trump wrote in a letter addressed to Cook, "In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity."
Cook argues her firing violates her due process rights as well as the law that governs the Federal Reserve, known as the Federal Reserve Act.
The complaint says the allegations are a pretext to promptly "vacate a seat for President Trump to fill and forward his agenda to undermine the independence of the Federal Reserve."
White House spokesman spokesman Kush Desai on Thursday said that the president has exercised his lawful authority to remove a Fed governor for cause for being "credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions."
Earlier this month, Federal Housing Finance Agency director Bill Pulte, a close Trump ally, who oversees the mortgage giants Fannie Mae and Freddie Mac, accused Cook of mortgage fraud, citing two home loans she obtained weeks apart in 2021, before joining the Federal Reserve. The two properties were in Michigan and Georgia. Pulte said Cook had represented that each property would be used as her primary residence — a declaration that often results in more favorable loan terms.
Cook wants the court to confirm her status as a member of the board of governors, "safeguard her and the Board's congressionally mandated independence, and allow Governor Cook and the Federal Reserve to continue its critical work."
Cook's lawsuit names Trump and the board of governors of the Federal Reserve. It also names Powell "to the extent that he has any ability to take any action to effectuate President Trump's purported termination of Governor Cook." The Fed declined to comment on its board the Powell being named in the lawsuit.
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