Governor of the Federal Reserve Lisa Cook filed a lawsuit against President Donald Trump on Thursday, arguing that he has no power to remove her from office.
Trump’s attempt to oust Cook comes as he’s trying to exert his control over the central bank. Trump said Cook was to be fired “effective immediately” in a letter published on Monday.
The next day, Cook released a statement saying Trump had “no cause” to fire her and that he lacked the “authority” to do so.
“I will not resign,” Cook said. “I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Cook’s lawsuit argues that Trump violated federal law in attempting to fire her, citing a section of the Federal Reserve Act of 1913. The act states that presidents can only remove a Federal Reserve governor “for cause,” generally accepted to mean an extreme failure of competence.
The lawsuit describes the move by Trump as “unprecedented and illegal,” stating that it would be “the first of its kind” if Cook is to be formally removed.
Trump cited allegations that Cook misrepresented mortgage applications years before joining the Fed. The claims promoted by Bill Pulte, a Trump ally and the head of the Federal Housing Finance Agency, have not resulted in charges against Cook. The lawsuit refers to these allegations as “unsubstantiated.”
Further complicating the legality of Cook’s attempted firing is a legal precedent that bars the president from firing a Federal Reserve governor. In May, the Supreme Court ruled that Federal Reserve governors are part of “a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” making them distinct from other federal employees Trump could fire.
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