US President Donald Trump has taken steps to remove Federal Reserve Governor Lisa Cook, the first Black woman to serve on the Federal Reserve Board, by citing mortgage fraud allegations. Cook’s legal team has dismissed the attempt, insisting that Trump has no authority to oust her. In a letter to Cook, Trump argued that the allegations of record falsification in loan applications for two homes—where he claimed she misrepresented primary residences to secure better mortgage terms—constituted a sufficient cause for immediate dismissal. The accusations stem from Federal Housing Finance Agency Director Bill Pulte, a Trump appointee, who alleged misconduct in loan applications. Trump has invoked provisions in the Fed’s founding law to justify the removal, though legal experts question whether the allegations meet the standard of ’cause’ under the Federal Reserve Act. Cook, appointed by President Joe Biden in 2022, has vowed to remain in her position, stating that Trump has not met the legal threshold for termination.
Under the Federal Reserve Act, a governor may only be removed for cause, usually defined as neglect of duty or misconduct. Legal experts have questioned whether Trump has met that standard, noting that the allegations are unproven in court and involve personal matters. Since taking office, Trump has pressed the Federal Reserve for rapid monetary easing. The FRB, stressing its independence, has resisted lowering interest rates, warning that tariffs introduced by the president could stoke inflation. He has countered that import duties are not driving prices higher and accused Fed Chair Jerome Powell of keeping rates too high, raising debt-servicing costs.