President Donald Trump has formally initiated a new attempt to remove Federal Reserve Governor Lisa Cook,
issuing a White House notice giving her three weeks to respond to unproven allegations of mortgage fraud, ABC News reports. The administrative action follows a Supreme Court ruling in June that blocked her immediate removal on procedural grounds but left open the potential legal avenue for her dismissal "for cause."
The formal notice, purportedly signed by White House Deputy Chief of Staff Dan Scavino, alleges gross negligence in loan documentation prior to Cook's tenure at the central bank. Administration officials argue that the proposed actions call into question her credibility as a monetary policymaker, even if the allegations themselves do not result in a criminal conviction. Rate the news with InvestingPro -
The conflict stems from appeals by Federal Housing Finance Agency Director Bill Pulte, who last year initiated a Justice Department investigation into Cook's loan applications. Attorney Abby Lowell and Cook herself have repeatedly rejected the allegations as a trumped-up pretext, arguing that the efforts are aimed at undermining the central bank's statutory independence.
In a 5-4 decision in June, the Supreme Court upheld the historic system designed to shield the Federal Reserve Board from executive interference. Chief Justice John Roberts, writing for the majority, clarified that Cook is entitled to formal notice and an opportunity to respond to the allegations before the courts can evaluate the legality of his removal "for cause."
Previously, in August of last year, Trump attempted to fire Cook as part of an escalating campaign of pressure on the central bank to ease monetary policy. Subsequently, federal trial and appellate courts stayed the dismissal, emphasizing that Congress had intentionally structured the seven-member board to resist political pressure.
According to ABC News, Cook's legal team has announced its intention to challenge the administration's latest move in federal court to protect her position and preserve the central bank's independence. The renewed trial will force the judiciary to assess whether the allegations meet the legal threshold required to remove a sitting Fed governor.