Lisa Cook’s lawyer says Trump’s termination letter was an ‘illegal action,’ vows to sue

Who’s on the board?

Allegations against Cook

Cook says she won’t resign

Removing governors ‘for cause’

Federal Reserve Gov. Lisa Cook will sue President Donald Trump’s administration to try to prevent him from firing her, her lawyer said Tuesday.

“President Trump has no

Trump’s unprecedented effort to fire Cook is likely to end up at the Supreme Court and could more clearly define the limits of the president’s legal

The Federal Reserve weighed in Tuesday for the first time on the firing, saying it would “abide

The Fed also defended its independence from politics: “Congress, through the Federal Reserve Act, directs that governors serve in long, fixed terms and may be removed

But the Fed’s statement did not answer a key question about Cook: Namely, whether she is continuing to serve at the Fed while the legal case plays out. Nor did it explictly criticize Trump’s attempt to fire her.

Trump, a Republican, has repeatedly demanded that Chair Jerome Powell and the Fed’s rate-setting committee cut its rate to boost the economy and reduce interest payments on the government’s $37 trillion debt pile.

If Trump succeeds in removing Cook from the Fed’s board of governors, it could erode the Fed’s political independence, which is considered critical to its ability to fight inflation because it enables the Fed to take unpopular steps like raising interest rates. A less-independent Fed could leave Americans paying higher interest rates, because investors would demand a higher yield to own bonds to offset potentially greater inflation in the future, pushing up borrowing costs throughout the economy.

Trump seems to have since focused his attention, having appointed two members of the board, Christopher Waller and Michelle Bowman, in his first term and has named Steven Miran, a top White House economist, to replace Gov. Adriana Kugler, who stepped down unexpectedly Aug. 1. If Miran’s nomination is approved

Trump criticized Powell at a cabinet meeting Tuesday and said ”we’ll have a majority very shortly” on the Fed.

The Fed’s board oversees financial regulations and also votes on all interest rate decisions. Five of the Fed’s 12 regional bank presidents also have a vote, with one of those five always being the New York Fed and the other four serving on a rotating basis.

Legal experts say the Republican president’s claim that he can fire Cook, who was appointed

“It’s an illegal firing, but the president’s going to argue, ‘The Constitution lets me do it,’” said Lev Menand, a law professor at Columbia University and

Menand said the Supreme Court construes the Constitution’s meaning, and “it can make new constitutional law in this case.”

Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, made the accusations last week. Pulte alleged that Cook had claimed two primary residences — in Ann Arbor, Michigan, and in Atlanta — in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those bought to rent.

The most likely next step for Cook is to seek an injunction against Trump’s order that would allow her to continue her work as a governor. But the situation puts the Fed in a difficult position.

“They have their own legal obligation to follow the law,” Menand said. “And that does not mean do whatever the president says. … The Fed is under an independent duty to reach its own conclusions about the legality of Lisa Cook’s removal.”

Trump said in a letter posted on his Truth Social platform late Monday that he was removing Cook effective immediately because of allegations she committed mortgage fraud.

Cook said Monday night that she would not step down. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no

The courts have allowed the Trump administration to remove commissioners at the National Labor Relations Board, the Merit System Protection Board and other independent agencies. Yet Cook’s case is different.

Those dismissals were based on the idea that the president needs no reason to remove agency heads because they exercise executive power on his behalf, the Supreme Court wrote in an unsigned order in May.

In that same order, the court suggested that Trump did not have the same freedom at the Fed, which the court called a “uniquely structured, quasi-private entity.”

The law that governs the central bank, the Federal Reserve Act, includes a provision allowing for the removal of Fed governors “for cause.”

“For cause” is typically interpreted to mean malfeasance or dereliction of duty

To establish a “for cause” firing also requires a finding of fact, said Scott Alvarez, the Fed’s former general counsel and now adjunct professor at Georgetown Law.

“We know there’s allegations

Lowell said Monday night that Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal

Cook is the first Black woman to serve as a governor. She was a Marshall Scholar and received degrees from Oxford University and Spelman College, and she has taught at Michigan State University and Harvard University’s Kennedy School of Government.

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