Federal Reserve Governor Lisa Cook filed a lawsuit against President Donald Trump on Thursday, contesting his attempt to remove her from the central bank’s Board of Governors.
The legal action, initiated in federal court in Washington, D.C., marks a historic challenge to what Cook’s lawyers describe as an unprecedented and illegal effort to oust her.
The lawsuit stems from allegations of mortgage fraud raised by Federal Housing Finance Agency Director Bill Pulte, which Cook’s legal team calls "unsubstantiated."
A hearing is scheduled for Friday at 10 a.m. ET to address the matter.
Cook’s lawsuit seeks a court declaration that Trump’s August 25, 2025, firing order is "unlawful and void" and that she remains an active member of the Federal Reserve’s Board of Governors.
The Federal Reserve Act allows removal of governors only "for cause," typically defined as inefficiency, neglect of duty, or malfeasance in office.
Cook’s filing argues that the mortgage fraud allegations, which involve claims she falsely declared two properties as primary residences in 2021, do not meet this standard, as they predate her Senate confirmation and lack substantiation.
The lawsuit also names Fed Chair Jerome Powell and the Board of Governors as defendants, as they are required to act on lawful removal orders.
The allegations against Cook, first publicized by Pulte on August 20, claim she misrepresented residency status on mortgage applications for properties in Michigan and Atlanta.
No criminal charges have been filed, and Cook has not addressed the allegations directly in her lawsuit.
The White House defends Trump’s action, stating the president acted within his authority to remove a governor "credibly accused of lying in financial documents."
Cook’s legal challenge highlights broader concerns about the Federal Reserve’s independence, with her lawsuit asserting that an independent Fed is "essential for a stable economy" and prevents political manipulation of monetary policy.
This case, potentially headed to the Supreme Court, could set a significant precedent for the central bank’s autonomy.