Fired Fed Governor Lisa Cook Vows Legal Fight Against Trump’s “Unlawful” Dismissal
Federal Reserve Governor Lisa Cook plans to sue Donald Trump over what her legal team calls an “illegal and baseless” attempt to remove her from the central bank.
The move comes just one day after Trump announced Cook’s dismissal “effective immediately,” citing unproven mortgage fraud allegations. In response, Cook’s attorney, Abbe Lowell, said Trump has “no authority” to fire her and pledged legal action.
“His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis,” Lowell said in a statement Tuesday. “We will be filing a lawsuit challenging this illegal action.”
The firing marks an unprecedented intervention by the president into the independence of the Federal Reserve. Trump has recently escalated attacks on Democratic officials and institutions, including making similar fraud accusations against New York Attorney General Letitia James and Senator Adam Schiff.
Speaking at a cabinet meeting Tuesday, Trump said: “She can’t have an infraction — especially that infraction,” referencing the unsubstantiated mortgage claims.
A White House spokesperson, Kush Desai, defended the move, saying Trump acted “within his lawful authority” and cited a U.S. code provision allowing for the removal of officials “for cause.”
“The President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions,” Desai told NBC News.
However, the Federal Reserve pushed back, emphasizing that board members serve fixed 14-year terms and can only be removed “for cause” — a standard not clearly defined in law.
“Congress, through the Federal Reserve Act, directs that governors serve in long, fixed terms and may be removed by the president only ‘for cause,’” the Fed said in a statement Tuesday. “As always, the Federal Reserve will abide by any court decision.”
The legal dispute could end up before the Supreme Court, which earlier this year ruled that Trump has authority to fire some independent regulators, though explicitly excluded the Fed from that decision.
The controversy began after Trump echoed claims from Bill Pulte, Director of the Federal Housing Finance Agency, who alleged Cook had listed two homes — in Michigan and Georgia — as primary residences on mortgage applications filed weeks apart.
Pulte urged a Justice Department investigation, calling it grounds for dismissal. Trump publicly demanded Cook’s resignation last week before formally announcing her removal Monday evening in a letter posted to social media.
Cook responded hours later:
“I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Democrats condemned the move as a political attack on central bank independence.
Senate Minority Leader Chuck Schumer called it a “brazen power grab,” while former Obama White House ethics lawyer Norman Eisen said Trump caved to partisan pressure from Pulte.
