WASHINGTON: Fed­eral Reserve Gov­ernor Lisa Cook filed a lawsuit on Thursday claiming US President Donald Trump has no power to remove her from office, setting up a legal battle that could reset long-established norms for the central ban­k’s independence.

Cook’s lawsuit said Trump violated a federal law allowing him to remove a Fed governor only “for cause” when the Republican president took the unprecedented step on Aug 25 of announcing he would fire her.

Trump has accused Cook of committing mortgage fraud in 2021, a year before she joined the central bank’s governing body.

Cook also filed a motion seeking a temporary restraining order declaring that Tru­mp’s effort to fire her is unlawful and to bar the Fed from taking steps to remove her pending further litigation.

In the court filings, Cook said an unsubstantiated allegation about conduct that took place before she was confirmed to her position at the Fed does not amount to cause. She denied committing mortgage fraud, but said that even if she had it would not justify her removal.

“The president would not have `cause’ to remove a Federal Reserve Governor even if he possessed smoking gun evidence that she jaywalked in college,” Cook’s lawyers wrote in the lawsuit.

The lawsuit also accused Trump of violating her right to due process under the constitution by firing her without notice or a hearing.

The case was assigned to Jia Cobb, a judge appointed by former president Joe Biden, a Democrat. The case is likely headed to the Supreme Court, where a conservative majority has tentatively allowed Trump to fire officials from other agencies, though it recently signalled the Fed may qualify for a rare exc­eption from direct control by the president.

Cook noted in her lawsuit that the court, in a May order, distinguished the Fed from ot­­her government agencies, citing its uni­q­­ue structure and “distinct historical tradition”.

Concerns about the Fed’s independence from the White House in setting monetary policy could have a ripple effect throughout the global economy. The dollar stumbled against other major currencies after Trump first said he would remove Cook.

A Fed spokesperson said on Tuesday, before the lawsuit was filed, that the Fed would abide by any court decision. Cook was appointed to the Fed in 2022 by Biden and is the first Black woman to serve as a Fed governor.

Pressure campaign

The law that created the Fed does not define “cause” or lay out any standard or procedures for removal. No president has ever removed a Fed board member and the law has never been tested in court.

Several federal laws requiring the president to have cause before removing members of other agencies say that the term can include neglect of duty, malfeasance, and inefficiency. Those laws could be a guide for courts to determine if Trump had cause to fire Cook.

Questions about Cook’s mortgages were first raised by William Pulte, a Trump appointee who is director of the Federal Housing Finance Agency. Pulte referred the matter to Attorney General Pamela Bondi for investigation.

Published in Dawn, August 29th, 2025