WASHINGTON — Federal Reserve Governor Lisa Cook is challenging an attempt by President Donald Trump to remove her from her position through a lawsuit filed in federal court. The legal action comes after Trump announced earlier this week that he had sufficient grounds to dismiss Cook, citing allegations of mortgage fraud that he claims could undermine the integrity of her role.
In her suit filed Thursday morning in Washington, Cook is seeking a ruling that Trump’s efforts to terminate her position are unlawful. Cook argues that her rights to due process, guaranteed under the Fifth Amendment, and her entitlement to notice and a hearing as outlined in the Federal Reserve Act have been violated.
In a letter shared on social media, Trump stated that he believed Cook’s termination was warranted, referencing accusations surrounding mortgage applications. During a cabinet briefing, he emphasized the importance of maintaining ethical standards among those overseeing financial matters.
The allegations emerged from Bill Pulte, Director of Federal Housing, who posted documents on social media suggesting that Cook may have inappropriately designated two properties as her primary residence while seeking mortgages in 2021. Pulte’s assertions have stirred significant controversy.
White House Press Secretary Karoline Leavitt supported the President’s stance, indicating that the evidence presented gives ample justification for Cook’s dismissal. She referred directly to the materials shared with Trump that allegedly demonstrate Cook’s misconduct.
Cook, who was appointed by former President Joe Biden and made history as the first Black woman to serve on the Federal Reserve Board, has yet to directly deny the claims. Treasury Secretary Scott Bessent remarked earlier this week on a business news program that Cook has not publicly stated that the allegations are unfounded.
Cook’s lawsuit defends her actions, stating that the allegations do not pertain to any misconduct during her term and remain unproven. It points out that any errors that may have occurred in her mortgage paperwork happened before she was confirmed by the Senate and therefore should not constitute grounds for dismissal.
A hearing regarding Cook’s request for a temporary restraining order is scheduled for Friday at 10 a.m. As she currently holds a 14-year term set to conclude in 2038, the outcome of this legal battle will have significant implications for her future with the Federal Reserve.
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