WASHINGTON (AP) , Federal Reserve governor Lisa Cook told the Trump administration it has no legal authority to oust her from the central bank’s governing board, making the case in a letter sent late Wednesday in reply to fresh threats from the White House.
Trump initially tried to dismiss Cook a year ago amid accusations that she committed mortgage fraud, allegations she has denied. The charge has never been proven or examined in court. The Supreme Court decided that Cook could stay on the job while litigation continues. The justices also indicated Trump could make another attempt to remove her as long as he provided proper notice and an opportunity to contest the action.
A White House aide earlier this month set a Wednesday deadline for Cook to respond.
In a statement, her lawyers, Abbe Lowell and Norman Eisen, declared: “For the second time in a year, we have explained why there is no legal basis for President Trump to remove Governor Cook for cause. An inadvertent error is not fraud, as the President and a third of his cabinet should know because they reportedly did the same thing. These attacks on Governor Cook are not about real estate paperwork; they are an attempt by President Trump to force the Federal Reserve to bend to his will.”
Trump administration officials have alleged that Cook listed two homes as “primary residences” on mortgage applications. Primary residences can sometimes qualify for lower mortgage rates or smaller down payments than second homes.
In her Wednesday letter, Cook said she had described one of those two homes in certain documents as a “vacation home” and never intended to mislead lenders. She maintained that any mistakes were unintentional and fell short of justifying her dismissal.
Should Trump succeed in removing Cook, he could install a replacement, giving his appointees a majority on the Fed’s board. Trump has repeatedly criticized the Fed for moving too slowly to cut its benchmark interest rate.