Fed governor Lisa Cook: "No legitimate basis for removal" on Trump mortgage claims

Lawyers for Federal Reserve governor Lisa Cook have submitted their case for why she cannot legally be fired, as President Trump seeks new avenues for dismissing the Biden appointee for cause.

The big picture: After the Supreme Court ruled against Trump's attempt to fire Cook last year over allegations that she claimed two different properties as her primary residence in mortgage documents, the White House has sought to introduce a more formal process in pursuit of the same goal.

• It is a closely watched case that may determine the political independence of America's central bank, by setting how high the bar is for a president to fire Fed governors.

Driving the news: Three weeks ago, the White House asked for her response to the substance of those allegations, which her lawyers submitted — and distributed to reporters — Wednesday evening.

• Cook's lawyers argue that "there is no legitimate basis for" removing Cook from the Fed board, where her term extends to 2034, and that the purported errors were "an entirely inadvertent oversight."
• They say that she was fully transparent with her lender and note media reports that Trump himself and five members of his cabinet have also had dubious claims of primary residency on a property in the past.

Catch up quick: Trump announced that he was firing Cook about a year ago for cause, alleging mortgage fraud after housing finance regulator Bill Pulte showed she had mortgage applications for two separate properties as a primary residence in a short time frame.

• The Federal Reserve Act gives governors of the central bank 14-year terms to insulate them from politics, but says the president can remove them "for cause."
• The Supreme Court ruled that Cook could stay in her job while the attempted firing is adjudicated, but did not lay out precise criteria of what clears the bar of firing a Fed governor for cause or how a president must establish it.
• In an apparent effort to establish legal cause, White House deputy chief of staff Dan Scavino wrote to Cook earlier this month citing the apparent mortgage application errors and asking for her defense.

What they're saying: "The process for seeking financing for the Atlanta condominium… began with Governor Cook using the lender's website to seek information about a 'vacation home' mortgage — a clear indication of the loan type she was looking to acquire," wrote Abbe David Lowell, Cook's attorney.

• "The lender, which previously worked with Governor Cook to refinance her Massachusetts property earlier that year, knew that she had lived in Michigan for more than 15 years and worked full-time as a tenured professor at Michigan State University. Governor Cook gave no indication that she was leaving to take any new job in Atlanta," Lowell wrote.
• Other documents how that Cook "regularly indicated her 'primary residence' or 'permanent residence' to be Michigan" and she "confirmed that her Atlanta property was a '2nd Home.'"
• "Governor Cook's actions demonstrate that there was no intentional misconduct and zero intent to defraud or mislead."

Of note: Lowell cites media reports of Trump himself and several cabinet members making dubious claims of a property's primary residence status, including Treasury Secretary Scott Bessent.

The other side: The White House did not immediately respond to a request for comment.

What's next: The question now is whether Trump again attempts to fire Cook, with more of a review process — and if so, how the courts respond.