Federal Reserve Governor Lisa Cook has sued President Donald Trump and Federal Reserve Chairman Jerome Powell to block her firing.
This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position which, if allowed to occur, would the first of its kind in the Board’s history. It would subvert the Federal Reserve Act (“FRA”), 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.The President’s actions violate Governor Cook’s Fifth Amendment due process rights and her statutory right to notice and a hearing under the FRA. Accordingly, Governor Cook seeks immediate declaratory and injunctive relief to confirm her status as a member of the Board of Governors, safeguard her and the Board’s congressionally mandated independence, and allow Governor Cook and the Federal Reserve to continue its critical work.
OK, Cook has a point.
In America, no one should lose their job or face any consequences over allegations.
If the DOJ has sufficient evidence of mortgage fraud against Cook, then it should indict her.
Trump fired Cook on Tuesday.
Trump cited a criminal referral from August 15, where William J. Pulte, director of the Federal Housing Finance Agency, told Attorney General Pam Bondi he had “sufficient reason to believe” Cook made false statements on one or more mortgage agreements.
“For example, as detailed in the Criminal Referral, you signed one document attesting that a property in Michigan would be your primary residence for the next year,” wrote Trump. “Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year.”
Last week, Bondi said the DOJ would look into the allegations, placing U.S. Pardon Attorney Ed Martin in charge of the investigation.
Trump explained that Cook could not stay on the board of governors because “the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator.”
Cook fired back in the lawsuit:
Congressional intent that the “for cause” standard in the FRA requires a finding of “inefficiency, neglect of duty, or malfeasance in office” is illustrated by the fact that Congress amended the FRA three months after the Supreme Court’s decision in Humphrey’s Executor to provide Board members with 14-year terms “unless sooner removed for cause by the President. ”Prior to that, the statute was silent on removal. The Humphrey’s Executor decision was raised in the hearings on the passage of these amendments to the FRA.—-As the Court’s articulation of the standard in Humphrey’s Executor makes clear, removal ‘for cause’ requires some connection to official conduct, prohibiting removal based on an unsubstantiated allegation of private misconduct (which in this case allegedly occurred prior to her Senate confirmation). And even to the extent that private misconduct could bear on a particular.
We need to know if the alleged mortgage fraud came up during her Senate confirmation hearing. I think it could be an essential point.
In all, Trump is reasonable in thinking that anyone who knowingly commits mortgage fraud should not have a place at the table to make monetary decisions that affect anyone.
Cook only faces accusations of mortgage fraud at this time.
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