Federal Reserve Governor Lisa Cook has formally stated that the Trump administration lacks a legal foundation to remove her from the central bank's governing board. This response comes after renewed threats from former President Donald Trump.
Trump initially sought to dismiss Cook a year ago, alleging she committed mortgage fraud. These allegations remain unproven in court. Cook denies the claims, and her attorneys have asserted that any purported errors in her mortgage applications were unintentional and do not constitute fraud.
Cook's legal team, including attorneys Abbe Lowell and Norman Eisen, issued a statement emphasizing that for the second time in a year, they have explained the absence of a legal basis for Trump to remove Cook for cause. They characterized the attacks on Cook as an effort to compel the Federal Reserve to align with Trump's policy preferences, particularly his dissatisfaction with the central bank's interest rate decisions.
Officials within the Trump administration had accused Cook of identifying two of her homes as primary residences on mortgage applications, a designation that can sometimes lead to more favorable loan terms. Cook, in her response, indicated that one of these properties was referred to as a "vacation home" in some documents and denied any intent to mislead lenders.
The Supreme Court had previously ruled that Cook could continue in her position while the litigation proceeded. The justices also indicated that Trump could pursue her removal again, provided he gave proper notice and an opportunity for Cook to contest the action. A White House aide had set Wednesday as the deadline for Cook to respond to the administration's concerns.
Should Trump succeed in removing Cook, he would gain the ability to appoint a successor, potentially shifting the majority on the Fed's influential board. Trump has frequently criticized the Federal Reserve, arguing it has been too slow in lowering its benchmark interest rate.