Federal Reserve Board Member Lisa Cook has sued President Trump for firing her, according to a 24-page lawsuit filed in the District of Columbia.
The lawsuit names Trump, the Board of Governors of the Federal Reserve System, and Fed Chair Jerome Powell as defendants.
"This case challenges President Trump's unprecedented and illegal attempt to remove Governor Cook from her position which, if allowed to occur, would bve the first of its kind in the Board's history. It would subvert the Federal Reserve Act, which explicitly requires a showing of "cause" for a Governor's removal, which an unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not."
Cook Trump Comp 082825 by scott.mcclallen
Trump fired Cook after she was accused of committing mortgage fraud. Cook allegedly claimed a Michigan address as a primary residence in June 2021 and then claimed an Atlanta address for another mortgage in July 2021, Pulte posted on X.
The central bank, which has 12 locations, sets interest rates and manages monetary policy, meaning that it can print or destroy money. It printed trillions of dollars during the COVID-19 pandemic that likely triggered a wave of inflation witnessed through higher energy and grocery prices. Inflation spiked to a 40-year high at 9.1% in 2022, according to the U.S. Bureau of Labor Statistics.
Director of the Federal Housing Finance Agency Bill Pulte alleged that Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud.”
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According to the letter, the U.S. Federal Housing department obtained Cook's mortgage documents that show she falsified state residency statuses for a property in Ann Arbor, Michigan and Atlanta, Georgia.
In Michigan, someone who claims a principal residence can avoid paying up to 18 mills in local property taxes for a permanent residence but not for second homes or rental properties. Anyone claiming the homestead tax credit must live in Michigan for at least 183 days to exempt a residence from local school district taxes.
Trump wants the Federal Reserve to cut interest rates, which it might in September. Lower interest rates make buying expensive items like homes and vehicles cheaper when financed over time.
On Aug. 19, Trump posted on Truth Social:
"Could somebody please inform Jerome 'Too Late' Powell that he is hurting the Housing Industry, very badly? People can’t get a Mortgage because of him. There is no Inflation, and every sign is pointing to a major Rate Cut. 'Too Late”'is a disaster!"
The central bank, which has 12 locations, sets interest rates and manages monetary policy, meaning that it can print or destroy money. It printed trillions of dollars during the COVID-19 pandemic that likely triggered a wave of inflation witnessed through higher energy and grocery prices.
Inflation spiked to a 40-year high at 9.1% in 2022, according to the U.S. Bureau of Labor Statistics.
The Federal Reserve has 12 voting seats that rotate depending on the year, according to the St. Louis Federal Reserve. Seven board members and the New York Federal Reserve president hold permanent voting power while the other votes are given to rotating presidents of the other 11 Federal Reserve Banks.
Interest rates have hovered around 6% for two years. In 2020, rates dropped as low as 2.6%, according to the St. Louis Federal Reserve.
The interest rate might seem high now, but in 1981, that rate spiked to nearly 17%.
The Federal Open Market Committee makes policy for the Federal Reserve. It meets eight times per year.
Trump's administration is also investigating New York Attorney General Letitia James for alleged mortgage fraud.
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