Federal Reserve member Lisa Cook is fighting against President Trump’s attempt to remove her, claiming on Tuesday that she couldn’t disclose certain mortgage information during the verification process.
Cook argues that a proper hearing would show the government was aware of alleged inconsistencies in her documents, which she noted on her application form. This expands her objections to her removal.
Trump had previously announced Cook’s termination, citing the need for a “cause” to dismiss a Federal Reserve member. This was linked to allegations of mortgage fraud based on a referral from the Federal Housing and Treasury Agency (FHFA).
The situation raises questions about the independence of the federal government from White House influence and has led Cook to file a lawsuit, prompting courts to evaluate new attempts at expanding presidential powers.
Lowell, Cook’s attorney, mentioned that Cook had submitted a survey and provided a report to the Senate. He noted that Trump would have viewed the alleged inconsistencies as similar to those referred to in her documents.
Cook was confirmed by the Senate in May 2022, and her lawyer states that all discrepancies were included in materials shared with the White House before her confirmation.
Lowell also emphasized that Cook did not commit mortgage fraud.
“If unverified allegations are enough to justify removal, then the president could dismiss board members over mere policy disagreements, like interest rates,” Lowell remarked, stressing that this isn’t the law.
Last week, the Justice Department presented in court that conflicting statements in financial documents could serve as grounds for removing senior financial officers, regardless of any criminal evidence.
On August 15, FHFA director Bill Prute claimed that in 2021, Cook had stated misinformation in mortgage documents regarding properties in Michigan and Georgia. He pointed out that while she referred to one property as an investment or rental in government documents, she categorized another as a “second home.” This was part of the claims brought forth last week.
During a hearing on Friday, DOJ lawyer Yaakov Roth questioned how these discrepancies didn’t qualify as a basis for Cook’s removal, expressing uncertainty.
Cook’s team has requested the court to prevent Trump’s attempts from taking effect and to safeguard the status of other Federal Reserve governors as the lawsuit unfolds. The government has asked judges to rule by September 9, so they can appeal if necessary before the Fed’s next meeting on September 16.
