U.S. President Donald Trump has referenced mortgage fraud allegations in his efforts to remove Federal Reserve Governor Lisa Cook.
U.S. President Donald Trump has initiated efforts to dismiss Federal Reserve Governor Lisa Cook. However, her legal counsel announced they would challenge this action, contending that the president does not possess the legal authority to do so.
In a communication dispatched to Cook on Monday and subsequently shared on his Truth Social platform, Trump asserted he possessed “sufficient cause” for the dismissal of the first Black woman appointed to the Federal Reserve Board (FRB). He defended the immediate termination by referencing allegations that she had falsified documents to secure more advantageous mortgage conditions.
These accusations originated from Bill Pulte, the Federal Housing Finance Agency Director and a Trump appointee. Pulte claimed Cook had misrepresented information in loan applications for two properties – one in Michigan and another in Georgia – by designating both as her primary residence to secure more favorable mortgage rates.
Trump stated that the alleged fraud had compromised Cook’s position, asserting she could no longer serve effectively as a financial regulator. He cited a clause within the Federal Reserve’s foundational legislation, which he contended permits a president to remove governors for cause.
Cook was appointed to the Federal Reserve Board in 2022 by then-President Joe Biden, with her term slated to continue until 2038. In a statement issued via her attorney on Monday, she declared that Trump had “purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign.”
According to the Federal Reserve Act, a governor can only be dismissed for cause, typically defined as professional misconduct or neglect of duties. Legal analysts have raised doubts about whether Trump’s actions meet this legal threshold, pointing out that the allegations remain unproven in court and pertain to personal affairs.
Throughout his presidency, Trump has consistently urged the Federal Reserve to implement swift monetary easing policies. The FRB, emphasizing its operational independence, has thus far refrained from reducing interest rates, cautioning that the tariffs imposed by the president might fuel inflationary pressures.
Trump, however, has countered that import duties are not responsible for rising prices and has accused Fed Chair Jerome Powell of maintaining interest rates at an excessively high level, thereby increasing debt-servicing expenses.