Trump’s attempt to fire Fed governor Lisa Cook raises legal and political questions.
Lisa Cook may not have to go, although we can expect a big food fight before that gets settled.
As John noted last night, Donald Trump moved to fire the Federal Reserve governor, citing both his authority under Article II and the Federal Reserve Act of 1913. Trump claimed to have cause based on a criminal referral from the Federal Housing Finance Agency to the Department of Justice for alleged mortgage fraud, having signed nearly simultaneous homesteading claims in Michigan and Georgia.
Cook responded late yesterday by refusing to leave her position, claiming Trump has no authority to fire her. At issue is whether a criminal referral amounts to just cause, or at least that’s what seems to be her point:
In a letter to Cook he posted on social media late Monday, Trump said he would seek to fire her immediately, citing his authority to remove Fed governors for cause, meaning malfeasance or some form of dereliction of duty.
The Trump administration has accused Cook of committing fraud in 2021 while seeking mortgages on two properties — on a home in Michigan and a condominium in Atlanta — by describing both of them as her primary residence.
Through a spokeswoman, Cook said in a statement late Monday: “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.” A spokeswoman confirmed that Cook had hired an outside attorney.
First off, let’s note that the Trump administration has taken a particular interest in the topic of mortgage fraud since returning to office, and the motive is very clear. New York Attorney General Letitia James tried to pillory Trump on similar types of charges in civil court, getting a crippling half-billion-dollar judgment against him that only got vacated last week on appeal. That case was absurd; a fraud case that had no victim, based on valuations that lenders largely ignored anyway on loans that got repaid fully as expected.
