Federal Reserve Board member Lisa Cook is planning to challenge President Trump’s attempt to fire her from the central bank over allegations of mortgage fraud.
She’s also hired a high-powered lawyer Abbe Lowell, whose client list has included Hunter Biden, ex-Sen. Robert Menendez and Ivanka Trump.
“President Trump purported to fire me ’for cause’ when no cause exists under the law, and he has no authority to do so,” Ms. Cook said. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Later Tuesday, Mr. Lowell issued a separate statement saying he would file a lawsuit to fight the firing.
Mr. Trump shrugged it off, saying legal fights are common and he stands by the accusation against Ms. Cook.
“She can’t have an infraction, especially that infraction,” Mr. Trump said at a Cabinet meeting.
SEE ALSO: Trump says he is removing Lisa Cook from the Fed board
Mr. Trump late Monday posted a letter that says he is removing Ms. Cook from the Fed, citing legal authority allowing him to remove a governor.
He pointed to evidence that Ms. Cook signed 2021 documents listing a Michigan property as her intended primary residence and then, shortly later, listed a Georgia property as her primary residence.
Mr. Trump says the documents showed evidence of mortgage fraud to obtain better loan terms, or poor judgment at best, and that Ms. Cook could not be trusted to guide monetary policy.
No president has fired a Fed governor. The Federal Reserve Act of 1913 allows presidents to fire Fed governors “for cause,” which is generally believed to mean gross misconduct or malfeasance or professional neglect — though it might be open for interpretation.
Democrats and Ms. Cook’s lawyer said Mr. Trump is using a flimsy pretext to reshape the Fed board, setting up a legal fight that could reach the Supreme Court.
Mr. Lowell said Mr. Trump’s firing was based solely on assertions from a housing regulator and would result in litigation.
“President Trump has no authority to remove Federal Reserve Governor Lisa Cook. His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” Mr. Lowell said.
Ms. Cook is the first Black woman to sit on the Fed’s Board of Governors. President Biden nominated her to the board in 2022.
Her removal and replacement, alongside confirmation of a pending governor nominee, would give Mr. Trump a board stocked with a Trump-appointed majority.
“We’ll have a majority very shortly, so that will be great,” Mr. Trump said. “Once we have a majority, housing is going to swing, and it’s going to be great. People are paying too high an interest rate.”
Stocks were little changed Tuesday, trading in slightly positive territory as Mr. Trump ramped up his attacks on the Fed. For months, Mr. Trump has demanded lower interest rates from the central bank to juice his economic agenda.
Some economists and investors will get skittish if they think the Fed loses its independence and follows political dictates instead of the economic data.
“This attempted firing shreds the independence of the Fed and puts every American’s savings and mortgage at risk,” said Senate Minority Leader Charles E. Schumer, New York Democrat. “Donald Trump is playing a dangerous game of Jenga with a key pillar of our economy. This brazen power grab must be stopped by the courts before Trump does permanent damage to national, state, and local economies.”
Others said Mr. Trump, who was convicted in 2024 of 34 counts of falsifying business records in New York, was being hypocritical.
“To the extent anyone is unfit to serve in a position of responsibility because of deceitful and potentially criminal conduct, it is the current occupant of the White House,” said House Minority Leader Hakeem Jeffries, New York Democrat. “The American people are not buying your phony projection and slander of a distinguished public servant.”
Bill Pulte, the director of the Federal Housing Finance Agency, said the administration is simply following the facts.
“If you commit mortgage fraud in America, we will come after you, no matter who you are,” he wrote on X.
Commerce Secretary Howard Lutnick backed that view Tuesday in an interview on CNBC, saying Ms. Cook must go if the facts are not on her side.
“The real question should be, did she commit mortgage fraud, yes or no? And if you did commit mortgage fraud, please get out of the federal government,” Mr. Lutnick said. “Get out of the seat of the governor of the Federal Reserve and go away.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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