US Federal Reserve governor sues Trump over attempted dismissal
Lisa Cook, the US Federal Reserve governor, is suing Donald Trump over his attempt to dismiss her for alleged mortgage fraud.
Mr. Trump on Monday claimed Ms. Cook, a Joe Biden appointee, had lied on mortgage applications to secure better loan terms on two homes, and said he no longer had confidence in her “integrity.”
“At a minimum, the conduct in question exhibits the sort of negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” he said.
The dollar fell following the president’s announcement, although it has since recovered, with many viewing Mr. Trump’s move as an effort to replace Ms. Cook with an ally on the board.
Such a move would challenge the limits of presidential power over the independent US central bank, which sets interest rates.
Ms. Cook, the first black woman to serve on the Federal Reserve’s governing board, has consistently voted to keep interest rates steady. Mr. Trump has made it clear he desires the Fed to cut interest rates to 1 percent.
In a lawsuit filed on Thursday, Ms. Cook stated Mr. Trump’s claims were not sufficient “cause” to dismiss her because the alleged conduct was unproven and occurred before her Senate confirmation.
“This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position which, if allowed to occur, would be the first of its kind in the Board’s history,” her lawyer, Abbe Lowell, wrote in the suit in Washington federal court.
The lawsuit marks a major escalation in the ongoing clash between the White House and the Fed, which has resisted Mr. Trump’s demands to lower interest rates even as he has repeatedly criticized Jerome Powell, chair of the Federal Reserve.
In the filing, Ms. Cook suggested the attempts to remove both her and Mr. Powell are part of the president’s effort to take control of the Fed.
Her lawyer has requested an emergency hearing on her motion for a temporary order preventing Mr. Trump from removing her from her post.
On Tuesday, Mr. Lowell warned that Mr. Trump had “no authority” to remove her from her position on the board of the Federal Reserve.
“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 action,” Mr. Lowell said.
The White House has not yet commented on Ms. Cook’s legal filing.
World Affairs Correspondent
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