Lisa Cook, governor of the US Federal Reserve, during a Fed Listens event in Washington, DC, US, on Friday, March 22, 2024.
Al Drago | Bloomberg | Getty Images
Federal Reserve Board Governor Lisa Cook will file a lawsuit challenging her removal by President Donald Trump, her attorney said Tuesday.
“President Trump has no authority to remove Federal Reserve Governor Lisa Cook,” the lawyer, Abbe Lowell, said in a statement, a day after Trump cited allegations of mortgage fraud by Cook in firing her.
“His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis,” Lowell said.
“We will be filing a lawsuit challenging this illegal action.”
The White House and the Justice Department did not immediately respond to CNBC’s requests for comment on Lowell’s statement.
The Federal Reserve’s media office has not commented on Trump’s action, nor replied to CNBC’s question about whether Cook is working at her office on Tuesday or remotely.
If Cook does sue, the case could end up being decided by the Supreme Court.
The Federal Reserve Act of 1913 says that a president can fire a member of the Federal Reserve Board only “for cause.”
That has long been understood to mean malfeasance or dereliction of duty while a board member.
The Justice Department last week opened a criminal investigation of Cook after she was accused of making false statements on home mortgage applications by Federal Housing Finance Agency Director Bill Pulte.
Pulte pointed to documents that Cook allegedly signed for properties in Michigan and Georgia saying they were each her primary residence, which he claimed was done “in order to potentially secure lower interest rates and more favorable loan terms.”
The documents would have been signed before Cook joined the Fed.
Trump cited those allegations on Monday night in a letter to Cook notifying her of her removal.
Cook responded Monday, saying in a statement, “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.”
“I will not resign,” she said. “I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
— CNBC’s Kevin Breuninger contributed to this story.
