Trump Fires US Fed Governor Over Alleged Mortgage Fraud

Lisa Cook, who took out property loans in question before Fed post, rejects allegations

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NEW YORK/WASHINGTON — US President Donald Trump on Aug. 25 said he was firing Federal Reserve Governor Lisa Cook over alleged improprieties in obtaining mortgage loans, an unprecedented step that could test the boundaries of presidential power over the independent monetary policy body should it be challenged in court.

Mr. Trump said in a letter to Dr. Cook, the first African-American woman to serve as head of the Federal Reserve's governing body, that he had "sufficient cause to remove you from your position" because in 2021, she indicated on documents for separate mortgage loans on properties in Michigan and Georgia that both were her primary residence where she intended to live.

Dr. Cook responded several hours later in a statement emailed to reporters through the law office of lawyer Abbe Lowell, saying of Mr. Trump that "no causes exist under the law, and he has no authority" to remove her from the job she was appointed to by then-US President Joe Biden in 2022. "I will continue to carry out my duties to help the American economy," she said.

Mr. Lowell said that Mr. Trump's "demands lack any proper process, basis or legal authority. We will take whatever actions are needed to prevent this attempted legal action."

Questions about Dr. Cook's mortgages were first raised last week by US Federal Housing Finance Agency Director William Pulte, who referred the matter to Attorney General Pamela Bondi for investigation.

Though the terms of Fed governors are structured so that they outlast the term of a given president, the Federal Reserve Act does allow removal of a sitting governor "for cause."

That has never been tested by presidents who, particularly since the 1970s, largely have taken a hands-off approach to Fed matters as a way to ensure confidence in US monetary policy.