Hold onto your wallets, folks, because the Trump administration is back at it with another bombshell move targeting the Federal Reserve.
According to Conservative Brief, the White House sent a letter to Fed Board Governor Lisa Cook on Wednesday, putting her on notice that the president is weighing her removal from the central bank's governing board. The reason? Allegations that she made false statements on mortgage loan documents. Cook, who was placed on the Fed Board by President Joe Biden back in May 2022, now has just three weeks to respond to the accusations.
A copy of that explosive letter was also delivered to Cook's lawyer, the well known attorney Abbe Lowell. Talk about getting served!
So here's where it gets really juicy. This whole situation traces back to a criminal referral that former Federal Housing Finance Agency Director Bill Pulte submitted to the Department of Justice. Pulte accused Cook of committing mortgage fraud by allegedly claiming a secondary home was actually her primary residence on loan paperwork. The Trump administration is now using that allegation as grounds to boot her from the board "for cause."
But lower courts have already thrown cold water on similar arguments. Federal judges have generally ruled that the Fed's removal provision only covers conduct that happens while someone is actually serving on the board, not stuff from before they were appointed. And in June, the Supreme Court refused to grant the administration's requested relief while litigation was still ongoing, essentially saying Team Trump hadn't shown enough likelihood of winning on the merits.
This could easily spark yet another legal showdown over how much power a president actually has to remove Federal Reserve governors. The independence of the central bank has been a hot button issue throughout Trump's current term, with the White House frequently clashing with the Fed over economic policy.
Meanwhile, Trump's legal plate is overflowing. He's also pursuing a Supreme Court appeal in his long running civil case against Hillary Clinton. Justice Clarence Thomas recently approved extra time for Trump's legal team to file their petition, pushing the deadline to September 9. That case involves claims that Clinton and associates promoted allegations about Trump's 2016 campaign colluding with Russia. A federal appeals court had previously tossed the lawsuit and slapped nearly one million dollars in sanctions on Trump, his attorney Alina Habba, and her New Jersey law firm.
Thomas granting the extension is standard procedure and doesn't signal anything about how the court views the case. At least four justices would need to agree before the Supreme Court would even consider hearing the appeal.
One thing is crystal clear: the Trump administration is not backing down from any fight, whether it involves the Federal Reserve, the courts, or old political rivals. Buckle up, because this saga is far from over.
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