The Trump administration has formally initiated a new round of removal proceedings against Federal Reserve Board Governor Lisa Cook, signaling a fresh escalation in the legal battle over the central bank's independence.
On August 7, sources familiar with the matter revealed that the White House sent a written notice to Cook this week, stating the president is "considering" removing her for "gross misconduct" and demanding she respond to the allegations within three weeks.
The letter, reportedly signed by White House Deputy Chief of Staff Dan Scavino, follows a 5-4 Supreme Court ruling in June that blocked Trump's direct dismissal of Cook on procedural grounds, but left a legal pathway for him to revive the removal effort.
This latest move shifts the legal standoff between Trump and the Fed from procedural disputes to substantive arguments, as courts will likely be forced to assess whether the allegations against Cook are valid and whether the president has met the statutory "cause" standard.
Cook's attorney, Abbe Lowell, promptly stated he would challenge this "latest pretext" and continue to defend Cook's position and the historic independence of the Federal Reserve.
Allegations Stem from a Trump Ally's Complaint
The allegations against Cook originated from a complaint by Bill Pulte, now the director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac, a staunch Trump supporter. The specific claim alleges that Cook falsified bank documents to secure favorable loan terms.
The White House's notice letter, citing these allegations, argues that even if the conduct does not constitute a crime, it demonstrates Cook's untrustworthiness as a Fed governor, amounting to "gross misconduct." Notably, the letter also claims Cook's actions could carry a sentence of up to 30 years in prison.
Cook herself denies any wrongdoing and has never been charged with any crime. She was confirmed to the Fed by a 50-50 Senate vote, with then-Vice President Kamala Harris casting the tie-breaking vote.
Following the Supreme Court's ruling, Cook stated: "Bringing up mortgage documents I signed years before joining the Fed is just a smokescreen. This is pure political retaliation—they're just looking for an excuse to oust me because I refuse to bow to political pressure and insist that interest rate decisions must be based solely on the best interests of the American people."
Supreme Court Ruling Leaves Trump a Window to Act
Since Trump first sought to remove Cook in August of last year, this legal battle has traversed multiple judicial levels.
Federal District Court Judge Jia Cobb ruled that the Fed Board is "designed to be insulated from policy pressures and does not need to execute the president's agenda," and refused to allow the dismissal to take effect.
The D.C. Circuit Court of Appeals subsequently upheld that ruling, and the Supreme Court's June decision further supported the legal status of Fed independence in principle.
Chief Justice John Roberts, writing for the majority, stated that Cook has the right to receive notice and respond before being removed for "cause," but the Supreme Court did not make factual findings on the allegations themselves.
Roberts' ruling also left a clear opening: "Whether the president can lawfully remove Cook depends largely on the specific facts. Since the relevant facts have not yet been verified and assessed under the statutory standard, this opinion does not reach a conclusion on the factual matters."
This language effectively provided a procedural path for Trump to proceed.
The Supreme Court also reaffirmed the structural independence of the Fed from the executive branch, emphasizing that "any change to this system must come from Congress, not the courts."
Roberts warned in the ruling that allowing the president to remove Fed members at any time for any reason would fundamentally undermine this structural design.
After the ruling, Trump posted on social media, calling the case "sent back on purely procedural grounds" and vowing to "take immediate, appropriate action" to ensure that "those who have engaged in misconduct do not make critical decisions for America's well-being."
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