Executive Summary
- Attorney Abbe Lowell announced plans to file a lawsuit challenging President Trump’s attempt to remove Federal Reserve Governor Lisa Cook, arguing Trump lacks the authority and “sufficient cause.”
- Governor Lisa Cook has firmly rejected President Trump’s removal attempt, stating she will not resign and will continue her duties, as no legal “cause” exists for her termination.
- This attempt to remove a Federal Reserve governor is unprecedented in the institution’s 111-year history, setting up a legal confrontation over the undefined criteria for “cause” and the central bank’s independence.
The Story So Far
- The current legal challenge stems from President Donald Trump’s unprecedented attempt to remove Federal Reserve Governor Lisa Cook, an action without parallel in the institution’s 111-year history. While the Federal Reserve Act allows a president to remove board members “for cause,” the specific criteria for “cause” are not explicitly defined, creating legal ambiguity. Trump has cited allegations of mortgage fraud against Cook as “sufficient cause,” although she has not been charged and firmly maintains that Trump lacks the authority to remove her.
Why This Matters
- The impending lawsuit challenging President Trump’s unprecedented attempt to remove Federal Reserve Governor Lisa Cook will test the legal interpretation of a president’s power to dismiss a Fed official “for cause,” potentially setting a significant new precedent for the independence of the nation’s central bank and redefining the relationship between the executive branch and the Federal Reserve.
Who Thinks What?
- President Donald Trump believes he has “sufficient cause” to remove Federal Reserve Governor Lisa Cook due to allegations of mortgage fraud, questioning her competence and trustworthiness as a financial regulator.
- Federal Reserve Governor Lisa Cook firmly rejects the attempt to remove her, stating that President Trump has no legal authority to do so and that no cause exists, vowing not to resign and to continue her duties.
- Abbe Lowell, attorney for Governor Cook, asserts that President Trump lacks any authority or legal basis to remove her and plans to file a lawsuit to challenge what he describes as an “illegal action.”
Abbe Lowell, attorney for Federal Reserve Governor Lisa Cook, announced Tuesday that he plans to file a lawsuit challenging President Donald Trump’s attempt to remove her from office. The announcement follows Trump’s declaration Monday evening that he had “sufficient cause” to fire Cook, citing allegations of mortgage fraud, though Cook has not been charged with any wrongdoing.
Legal Challenge Mounts Against Trump’s Action
Lowell stated that President Trump “has no authority to remove Federal Reserve Governor Lisa Cook” and that his attempt to fire her “lacks any factual or legal basis.” He confirmed the imminent filing of a lawsuit to contest what he described as an “illegal action.”
The legal challenge comes after Trump posted a letter on social media addressed to Cook, informing her of his determination to remove her. In the letter, Trump wrote, “At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
Later on Tuesday, Trump told reporters he would abide by a court decision regarding the matter. The specific allegations against Cook by Trump and his administration center on alleged mortgage fraud, though she has not faced any formal charges.
Governor Cook Vows to Stay
Governor Cook has firmly rejected the attempts to remove her. Last week, she stated she would not be “bullied to step down” and was committed to “gathering the accurate information to answer any legitimate questions and provide the facts.”
Following Trump’s letter on Monday night, Cook reiterated her stance, stating, “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.” She added, “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Unprecedented Removal Attempt
This attempt to remove a Federal Reserve governor is unprecedented in the institution’s 111-year history, as no board member has ever been fired by a president. The Federal Reserve Act permits a president to remove board members “for cause,” but the specific criteria that constitute “cause” are not explicitly defined, leading to potential legal ambiguities.
Attorney’s High-Profile Clientele
Abbe Lowell is a prominent attorney who has represented several high-profile individuals. His past clients include President Trump’s daughter Ivanka and her husband, Jared Kushner, concerning their use of private messaging for official White House business. Lowell has also represented Hunter Biden, son of former President Joe Biden, on tax-related charges, and currently represents New York Attorney General Letitia James in an FBI probe into potential mortgage fraud.
The impending lawsuit marks a significant legal and political confrontation over the independence of the Federal Reserve and the extent of a president’s power to remove its governors. The outcome of this challenge could set a new precedent for the relationship between the executive branch and the nation’s central bank, as both parties prepare for a court battle over the legality of Governor Cook’s attempted removal.
