Federal Reserve Chair Jerome Powell administers the oath of office to Lisa Cook to serve as a member of the Board of Governors at the Federal Reserve System during a ceremony at the William McChesney Martin Jr. Building of the Federal Reserve May 23, 2022, in Washington, D.C. (Photo by Drew Angerer/Getty Images)

WASHINGTON — Federal Reserve Governor Lisa Cook will challenge her removal, her attorney said Tuesday, arguing President Donald Trump “has no authority” to fire her.

Trump announced late Monday that he would fire Cook, the first Black woman to serve on the Federal Reserve Board, over allegations that she falsified documents to obtain a favorable mortgage rate. She has not been charged with a crime. 

Cook has consistently voted not to lower interest rates, rejecting requests Trump has made of the independent central banking board.

Cook’s attorney, Abbe David Lowell of Lowell & Associates, said in a statement to States Newsroom that she would sue to block the firing. Former president Joe Biden appointed Cook in 2022. Her term ends in 2038.

“President Trump has no authority to remove Federal Reserve Governor Lisa Cook,” Lowell said. “His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis.”

Bill Pulte, the director of the Federal Housing Finance Agency, referred Cook’s mortgage application to the Department of Justice for criminal prosecution. Pulte has made similar accusations against political enemies of the president.

Pulte has accused New York Attorney General Letitia James, who investigated Trump’s business dealings and won a finding of fraud in state court, and California U.S. Sen. Adam Schiff, who led the investigation into Trump’s first impeachment inquiry, of mortgage fraud.

Trump posted a letter on social media, arguing that the allegations of Cook’s mortgage fraud had called “into question your competence and trustworthiness as a financial regulator.” 

He said the Federal Reserve Act gave him the authority to dismiss a governor for gross misconduct. 

Trump’s fight with Fed

The president defended his decision to dismiss Cook to reporters during a more-than-three-hour Cabinet meeting. 

“We need people that are 100% on board,” Trump said, adding that he’s already considering someone else for the job.

Cook is not the only Federal Reserve Board member Trump has trained his criticism on. He has long gone after Federal Reserve Chair Jerome H. Powell for not lowering interest rates. 

Trump has pushed for lower interest rates to boost the economy, but rates have remained lower amid concerns that the president’s tariffs will produce price hikes. 

“I think we have to have lower interest rates,” Trump said Tuesday. 

Dems defend Fed independence

The dismissal has drawn outrage from economists and Democrats, including the chair of the Congressional Black Caucus, Yvette D. Clarke of New York.

“President Trump is attempting to oust Dr. Lisa Cook — the first Black woman to serve on the Federal Reserve Board — with no credible evidence of wrongdoing,” she said in a statement.

“Let’s be clear: this is a racist, misogynistic, and unlawful attack on the integrity and independence of the Federal Reserve,” Clarke said. “It is a dangerous attempt to politicize and exert control over the central bank — one that will only continue to damage the economy, harm hardworking Americans, and undermine our credibility on the world stage.”

Heather Boushey, a top economist under the Biden administration, said in a statement that Trump’s move to fire Cook undermines the independence of the Federal Reserve. 

“It is clear from his actions that he does not believe he is bound by rule of law, but can — and will — intimidate experts to bend to his own ends,” Boushey said.

Senate Minority Leader Chuck Schumer said in a late Monday statement that any attempt to fire Cook “shreds the independence of the Fed and puts every American’s savings and mortgage at risk.”

“This brazen power grab must be stopped by the courts before Trump does permanent damage to national, state, and local economies,” Schumer said. “And if the economy comes crashing down, if families lose their savings and Main Street pays the price, Donald Trump will own every ounce of the wreckage and devastation families feel.”

The top Democrat on the House Ways and Means Committee, Richard Neal of Massachusetts, slammed the president, calling Cook’s firing unlawful. 

“President Trump’s illegal removal of Federal Reserve Governor Lisa Cook is (an) economic assault,” Neal said in a statement. “Instead of taking responsibility for his own economic failures, he’s manufacturing a villain to blame. As seen around the world, politicizing the central bank means rampant inflation, higher mortgage rates, unstable retirement accounts, and more uncertainty for the people. All of which will threaten the financial security of every American.”