In a letter posted to his Truth Social account Monday, President Donald Trump wrote to Federal Reserve Board Governor Lisa Cook that he was removing her from her board position — a move that has never happened in the central bank’s 112-year history.
Cook was criminally referred to the Department of Justice on Aug. 15 by Bill Pulte, director of the Federal Housing Finance Agency (FHFA). In a letter to DOJ officials, Pulte alleged that Cook committed mortgage fraud by claiming two homes as her primary residence to potentially get better rates, and then allegedly received investment income by renting out one of the properties.
Trump’s letter claims he has privilege to remove Cook under Article II of the U.S. Constitution and the Federal Reserve Act of 1913. According to Trump’s letter, the Act provides that she may be removed, at his discretion, for cause.
“I have determined that there is sufficient cause to remove you from your position,” Trump stated.
Cook responded to Trump’s move to fire her in a statement provided to multiple news outlets by Lowell & Associates, the law firm representing her.
“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook stated. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
Abbe David Lowell, the law firm’s founder, said in a statement issued to various media outlets that Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal authority.” He said his firm “will take whatever actions are needed to prevent his attempted illegal action.”
When contacted by Scotsman Guide, representatives from the Federal Reserve said “we don’t have anything new to share at the moment.”
The move to fire Cook ramps up Trump’s challenges to the central bank. He has repeatedly berated Fed Chair Jerome Powell, both over his reluctance to lower interest rates this year and his alleged mismanagement of a $2.5 billion office renovation project. At one point, he threatened to fire Powell, though he later walked back those comments.
Sen. Elizabeth Warren, D-Mass., posted on social media that “Trump is desperately looking for a scapegoat to cover for his own failure to lower costs for Americans and firing Lisa Cook is his latest move. It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and any court that follows the law will overturn it.”
The Federal Reserve Act of 1913 states that the president has the right to remove a Fed governor “for cause,” meaning Trump would need to provide proof that he has sufficient legal cause to fire Cook. It is unclear whether the allegations against Cook meet that legal burden, since they have not been litigated in court.
Cook also has the right to sue to keep her job, which would make the matter subject to judicial review. It is unclear whether she would be allowed to remain on the board while the case works its way through the court system.
Although the Department of Justice has indicated it will launch an investigation into the allegations against Cook, she has not been convicted of a crime, raising further questions about the legality of Trump’s extraordinary move.
Pulte posted on social media praising Trump’s decision.
“Thank you President Trump for your commitment to stopping mortgage fraud and following the law. If you commit mortgage fraud in America, we will come after you, no matter who you are,” Pulte wrote, saying it was a statement from U.S. Federal Housing, the name he often uses when referring to the FHFA.
A Fed board member since 2022, Cook is the first African American woman and first woman of color to sit on the board.
After learning of the allegations against her, Cook said on Aug. 20 that she has “no intention of being bullied to step down from my position because of some questions raised in a tweet.”
Cook added: “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”
