Federal Reserve Governor Lisa Cook has initiated a lawsuit against President Donald Trump in response to his stated intent to terminate her position. She requests the court to declare the president’s order as “unlawful and void,” naming Fed Chairman Jerome Powell and the Board of Governors as additional defendants.
Trump has alleged that there are valid reasons to believe Cook made false statements concerning her mortgage documentation and has cited constitutional provisions he claims support his authority to remove her. The president’s actions have reportedly stemmed from his concerns about the Federal Reserve’s reluctance to reduce interest rates. Cook’s role on the board is significant, as she participates in decisions regarding interest rate policies in the U.S.
The lawsuit, filed on Thursday, could lead to complex legal challenges, potentially culminating in a decision by the U.S. Supreme Court. Cook’s attorney, Abbe Lowell, asserts that this case addresses Trump’s unprecedented attempt to remove her from the Board, which would mark a historical first. Lowell argues that such an action would undermine the Federal Reserve Act, which mandates a provision of cause for a governor’s removal, claiming that unverified allegations about Cook’s private financial statements do not meet this standard.
A White House spokesperson, Kush Desai, maintained that the president acted within his legal authority, citing credible accusations against Cook related to her financial disclosures as justification for her removal. The Federal Reserve Act does not provide the president with the power to dismiss Fed officials at will but allows for removal “for cause.”
The allegations against Cook originated from a public letter by Bill Pulte, a housing finance regulator allied with Trump, who accused her of inconsistencies regarding her primary residence. However, no criminal charges have been filed against Cook, nor is it clear if she is currently under investigation.
Cook’s lawsuit does not specifically address these allegations. She has denied any justification for her removal, while legal experts have expressed doubt regarding Trump’s legal standing. As a member of the Fed’s board, she is involved in the formulation of U.S. interest rate policy, which affects borrowing costs and savings rates for Americans as well as global monetary policy considerations. Cook voted with the majority to maintain interest rates in the Fed’s last meeting at the end of July.
Source: https://www.bbc.com/news/articles/c1dxl6ry4y3o?at_medium=RSS&at_campaign=rss