While Trump is allowed to fire Cook “for cause,” it’ll have to be adjudicated in court whether that applies in this case.
Key Facts
Cook’s attorney Abbe Lowell said Tuesday the Fed governor “will be filing a lawsuit challenging this illegal action,” claiming Trump’s decision to fire Cook “lacks any factual or legal basis.”
Trump released a letter Monday night announcing he was firing Cook, citing allegations that she made false statements on her mortgage agreements and saying that “calls into question [her] competence and trustworthiness as a federal regulator.”
Cook has pushed back against her firing, saying in a statement Monday night she will not resign and arguing Trump “purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.”
The Federal Reserve Act allows presidents to appoint governors to the Federal Reserve board, and also gives them limited authority to fire them, saying the president can only terminate a board member “for cause”—which typically refers to gross misconduct.
While Trump cited the mortgage allegations as a reason to fire Cook, legal experts have questioned whether that actually constitutes “just cause” under the law, as any allegations would typically have to be investigated first, and the governor being probed would have an opportunity to present evidence in their defense.
Columbia University law professor Lev Menand also told the Associated Press that “just cause” typically refers to misconduct that happens while on the job, and Cook “is not someone who is not carrying out their duties.”What To Watch For
It’s unclear when Cook’s lawsuit against Trump will formally be filed, or how long any legal battle will take to play out. It’s also still murky what will happen in the meantime, given Cook’s refusal to resign, and the Federal Reserve has so far not commented on whether Cook was working Tuesday following Trump’s letter.Who Is Lisa Cook?
Cook is serving a term on the Federal Reserve board that’s scheduled to expire in 2038. Appointed to the board by former President Joe Biden, Cook is the first Black woman to serve as a governor on the board. Prior to joining the Fed, Cook taught at Michigan State University and Harvard University, and she served in the Obama administration as a senior economist on the Council of Economic Advisers. She also served as a director of the American Economic Association Summer Training Program, as a research associate for the National Bureau of Economic Research and as a senior adviser on finance and development in the Treasury Department’s Office of International Affairs.What Is A Federal Reserve Governor, And Why Does Trump Firing Lisa Cook Matter?
The Federal Reserve is the central bank of the U.
