Trump fires Federal Reserve governor over alleged mortgage fraud
What's the story
United States President Donald Trump has announced his decision to immediately remove Federal Reserve official Lisa Cook from her position. He cited "sufficient reason" to believe that Cook had made false statements on mortgage agreements. In a letter posted on Truth Social, Trump wrote, "Pursuant to my authority under Article II of the Constitution...and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately."
Legal dispute
Cook vows to continue her duties
Cook has strongly denied Trump's allegations and said he doesn't have the authority to fire her. "President Trump purported to fire me 'for cause' when no cause exists under the law, and he has no authority to do so," she said in a statement. Cook also vowed to continue her duties as she has been doing since 2022.
Alleged misconduct
Trump's letter alleged Cook signed documents for different properties
Trump's letter alleged that Cook signed two documents for different properties in Michigan and Georgia, claiming both would be her primary residence. He questioned how she could be unaware of her first commitment when making the second. Last week, Trump had called for Cook's resignation over these allegations of mortgage fraud. These claims were made in a public letter by housing finance regulator Bill Pulte, seen as a Trump ally, to Attorney General Pam Bondi.
Defense stance
Cook learned about allegations from media
Cook told BBC that she learned about the allegations from the media, and they stemmed from a mortgage loan application she filed four years ago before joining the central bank. "I have no intention of being bullied to step down from my position because of some questions raised in a tweet," she said. She said she is now gathering accurate information to answer any "legitimate questions" about her financial history.
Legal implications
Trump's decision likely to raise legal questions
If either Cook or the Federal Reserve challenges Trump's decision, it could lead to a legal battle between the central bank and the White House, experts suggest. The Fed has been independent of the US government since 1951. Trump's decision is also likely to raise legal questions, as experts suggest that the White House will have to prove in court that it had sufficient reason to fire Cook.