President Donald Trump is proceeding with his effort to remove Lisa Cook from the Federal Reserve Board of Governors, formally notifying her of the president's intent and requesting a response to allegations of mortgage fraud. This move follows a Supreme Court decision in June that affirmed limits on the president's ability to dismiss Federal Reserve members, emphasizing the central bank's independence.
In a letter sent this week, the White House informed Cook that the president was "considering" her removal and requested that she address the allegations within three weeks. Sources familiar with the letter indicated it was signed by Deputy Chief of Staff Dan Scavino. The letter reportedly cited allegations that Cook committed crimes punishable by up to 30 years in prison, but argued her conduct constituted negligence that calls her trustworthiness into question.
Cook's attorney, Abbe Lowell, stated that the allegations are baseless and that there is no valid cause for removal. "No matter what President Trump tries to do next, this much is clear under the facts and Supreme Court precedent -- there is no valid cause for removing Governor Cook," Lowell said in a statement. "As we did before, we will challenge this latest pretext and preserve her position and the historic role of the Fed."
In a June 5-4 decision, Chief Justice John Roberts stated that Cook was entitled to notice and an opportunity to respond to allegations before removal "for cause." The Supreme Court did not rule on the validity of the underlying allegations but outlined a process for the president to follow. "Only after Cook has had the opportunity to respond to the charges made against her . . . may a final decision be made," Roberts wrote. "And only then can the courts assess the validity and sufficiency of such charges."
Following the Supreme Court's ruling, Trump indicated on social media that he would "take appropriate action immediately" to remove Cook. The current White House action appears to be an implementation of the steps prescribed by the court.
Trump first attempted to remove Cook in August of the previous year, amidst broader pressure on the Federal Reserve to lower interest rates. The allegations against Cook originated from referrals made by Bill Pulte, who is associated with the Federal Housing Finance Agency and is chairman of Fannie Mae and Freddie Mac. Pulte has previously made criminal referrals against political figures critical of Trump.
The Department of Justice previously investigated Cook based on Pulte's allegations of falsifying bank documents. Ed Martin, director of the DOJ's "Weaponization Working Group," also sent a letter to Federal Reserve Chairman Jerome Powell urging Cook's removal.
Both a federal district judge and the U.S. Court of Appeals for the District of Columbia Circuit had previously blocked Trump's attempt to remove Cook. U.S. District Judge Jia Cobb wrote that the Federal Reserve Board is designed to be independent of policy pressure and the executive branch's agenda. The Supreme Court's affirmation of these rulings underscored the Federal Reserve's structural independence.
Cook has denied any wrongdoing and has not been charged with a crime. She was confirmed by the Senate with Vice President Kamala Harris casting the tie-breaking vote. Cook previously stated that the effort to remove her was a pretext to interfere with the Federal Reserve's independence and its interest rate decisions.
This renewed effort by the Trump administration is expected to reignite legal debates surrounding the independence of the Federal Reserve and the grounds for removing its governors.