The lawsuit, filed in federal court in Washington, D.C., has the potential to make its way to the Supreme Court.

Cook’s lawyer, Abbe David Lowell, called the move to terminate Cook an “illegal action” in a statement ahead of the lawsuit.

“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.”

While the Supreme Court ruled earlier this year that the president generally has the power to remove independent agency members, the conservative majority stipulated in that case that Federal Reserve board members can only be fired for cause.

The Fed was created by Congress to conduct monetary policy independently of the political process. It would be a significant precedent if Trump succeeds in removing Cook and replacing her with an official more aligned with his policy preferences.

Trump is arguing that the allegations of mortgage fraud were the cause he needed to fire her. Trump announced the firing in a note posted to Truth Social. In the note, he accused her of “deceitful and potentially criminal conduct.”

The push to oust Cook began after Federal Housing Finance Agency Director Bill Pulte, who oversees the government-sponsored enterprises Fannie Mae and Freddie Mac, sent a criminal referral to Attorney General Pam Bondi claiming that Cook listed two homes, one in Michigan and one in Georgia, concurrently as her primary residence months before she was nominated to the Fed board.

In the letter to Bondi, Pulte said it appears Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute.”

“This has included falsifying residence statuses for an Ann Arbor, Michigan-based residence and an Atlanta, Georgia-based property in order to potentially secure lower interest rates and more favorable loan terms,” Pulte wrote.

Democrats have pushed back on the move, criticizing it as playing politics with the Fed.

“The illegal attempt to fire Lisa Cook is the latest example of a desperate president searching for a scapegoat to cover for his own failure to lower costs for Americans,” said Senate Banking Committee Ranking Member Elizabeth Warren (D-MA). “It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”

House Minority Leader Hakeem Jeffries (D-NY) also bashed the move in a statement.

“Dr. Lisa Cook is the first Black woman ever to serve on the Federal Reserve Board of Governors,” he said. “Donald Trump is trying to remove her without a shred of credible evidence that she has done anything wrong.”

IT IS UNCLEAR IF FEDERAL RESERVE GOVERNOR LISA COOK SHOWED UP TO WORK AFTER TRUMP FIRING

Trump has been pushing for lower interest rates, and if he is able to replace Cook, he will have another vote on the 12-person Fed board. Adriana Kugler, another Fed governor who voted to hold interest rates steady, recently and unexpectedly resigned, handing Trump another opening on the board.

Two members of the Federal Open Market Committee, Christopher Waller and Michelle Bowman, voted to lower interest rates at the last meeting.