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Cook files lawsuit over firing from Fed board

Federal Reserve Board member Lisa Cook sued President Trump on Thursday over his “unprecedented and illegal attempt” to remove her from her position.

© AP

She asked a judge to block her removal from the board to “safeguard” its congressionally mandated independence, allowing her and the Fed at large to “continue its critical work.”

“The operational independence of the Federal Reserve is vital to its ability to make sound economic decisions, free from the political pressures of an election cycle,” the complaint reads.

It sets up a legal battle that could redefine the president’s power over an institution traditionally seen as independent from the political whims of the White House, a new front in Trump’s quest to expand executive control.

The Federal Reserve Act says the president can only remove members of the governing board “for cause.” The courts have never weighed exactly what that means because no president has sought to remove a Fed governor, until now.

Trump claimed in his Monday letter firing Cook that he does have cause to remove her, pointing to a criminal referral from the Federal Housing Finance Agency that suggests she may have made false statements on one or more mortgage agreements.

The referral alleges Cook illegally deemed two properties in Michigan and Georgia her “primary residence,” a declaration that can result in a lower interest rate.

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