Federal Reserve Governor Lisa Cook plans to fight back in court against her unprecedented removal by President Donald Trump, her legal team said on Tuesday.
“President Trump has no authority to remove Federal Reserve Governor Lisa Cook. 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 illegal action,” Abbe Lowell of Lowell & Associates said in a statement to NOTUS.
Trump announced Monday evening that he was firing Cook. It is the first time in history that a president has tried to fire a central bank governor. While presidents cannot legally fire Fed officials without cause, Trump said in a letter posted to Trump Social that he had “sufficient cause” to remove Cook “effective immediately.”
Trump cited a “criminal referral” from the director of the U.S. Federal Housing Finance Agency, Bill Pulte, who alleged in a letter to Attorney General Pam Bondi that Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud.”
Despite Trump’s comments, Cook said she would not step down.
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook said in a statement her lawyers shared with NOTUS. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
When asked for comment on the potential lawsuit and Cook refusing to resign, White House spokesperson Kush Desai told NOTUS that the president was exercising his “lawful authority,” citing a statute that sets how many years members of the Board serve “unless sooner removed for cause by the President.”
“The President determined there was cause to remove a governor who was credibly accused of lying in financial documents from a highly sensitive position overseeing financial institutions,” Desai said.
Trump said Tuesday that he would “abide by the court” regarding Cook’s legal challenge after a reporter cited a statement from the Fed, which said it “will abide by any court decision.”
“Long tenures and removal protections for governors serve as a vital safeguard, ensuring that monetary policy decisions are based on data, economic analysis, and the long-term interests of the American people,” a Fed spokesperson said in a statement to NOTUS. “The Federal Reserve will continue to carry out its duties as established by law.”
The Fed did not respond to a question about whether Cook was continuing to come to work.
Democratic lawmakers have spoken out in support of Cook, while Republicans have remained largely silent.
Sen. Elizabeth Warren, ranking member of the Senate Banking Committee, decried what she called the “illegal attempt to fire Lisa Cook,” saying it was “an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”
Senate Minority Leader Chuck Schumer said the “attempted firing shreds the independence of the Fed” and accused the president of “playing a dangerous game of Jenga with a key pillar of our economy.”
House Democratic leader Hakeem Jeffries called the decision “baseless” and accused the president of “trying to remove her without a shred of credible evidence that she has done anything wrong,” noting Cook is the first Black woman to sit on the Federal Reserve Board of Governors. He drew criticism for his response for highlighting Cook’s identity, instead of the broader implications for the U.S. economy.
A spokesperson for House Financial Services Chair French Hill, a Republican, emphasized both the importance of the Fed’s independence and the seriousness of the allegation against Cook.
“The independence of the Fed is a cornerstone of sound economic governance. The allegations against Governor Cook are serious and the appearance of something unethical erodes trust in the Federal Reserve,” Dan Schneider, a spokesperson for the committee chair, said in a statement. “Congress has a constitutional responsibility to provide oversight, and the Committee looks forward to examining these allegations.”
A spokesperson for Senate Banking Committee Chair Tim Scott did not respond to a request for comment.
Trump has been ramping up pressure on the Fed, which he has publicly lambasted for refusing to cut interest rates. The central bank closely guards its reputation as an independent agency that makes monetary policy decisions based on economic data rather than political whims.
Fed Chair Jerome Powell has until this point been the president’s prime target. Trump, who appointed Powell in 2017, has accused him of playing politics with interest rates and repeatedly called on him to resign.
Powell, a lifelong Republican, has repeatedly said he would not resign if the president asked him to and that it would be illegal for the president to fire him.
The president can only remove Fed officials “for cause.”
“The courts have been clear that policy differences do not rise to the level of ‘for cause,’ it has to be some kind of malfeasance or criminal action or fraud or doing something that really is a high and bad thing,” Scott Alvarez, an adjunct professor at Georgetown University Law and former Fed general counsel, told NOTUS in a July interview.
When asked if Trump could fire Cook, Alvarez said we’re about to find out — and that the implications could extend beyond the Fed.
“If the president can remove people based on allegations without any finding that they actually committed some crime or did something wrong, that’s really troubling, because then nobody is safe,” Alvarez said.
Trump and Republican lawmakers have hammered Powell this summer over a costly renovation of Fed headquarters. Powell rejected reports of lavish renovation plans but acknowledged the project was over budget and reportedly asked the central bank’s inspector general to review the renovation costs.
This story has been updated with additional comments from President Donald Trump, a spokesperson for the Federal Reserve and Scott Alvarez.