Trump Dismisses Fed Governor Lisa Cook Over Mortgage Allegations, Prompting Legal and Institutional Concerns

U.S. President Donald Trump has ordered the immediate dismissal of Federal Reserve Governor Lisa Cook over unverified allegations of mortgage fraud—an unprecedented action that has sparked concerns about the central bank’s independence.

The accusations stem from Federal Housing Finance Agency Director Bill Pulte, a Trump appointee, who last week claimed that Professor Cook listed two primary residences in 2021—one in Atlanta and the other in Michigan.

Pulte suggested this may have been an attempt to secure more favorable mortgage rates, which are typically higher for second homes.

In a letter released on social media Monday night, Trump announced Cook’s termination “effective immediately,” citing his authority under the U.S. Constitution and the 1913 Federal Reserve Act. He argued that there was “sufficient reason” to believe she may have made false statements on mortgage documents.

Trump emphasized the importance of integrity within the Federal Reserve, stating: “The American people must be able to have full confidence in the honesty of the members entrusted with setting policy.” He further described Cook’s alleged actions as “gross negligence” that undermined her fitness for the role.

Cook, however, denied the allegations and firmly rejected Trump’s claim that he had the legal power to remove 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 written statement.

Her attorney, Abbe Lowell, echoed this position, calling Trump’s move baseless and legally invalid. “We will take whatever actions are needed to prevent his attempted illegal action,” Lowell added.

Professor Cook, appointed to the Federal Reserve Board in 2022 by President Joe Biden, made history as the first Black woman to hold the position. Her confirmation faced strong Republican opposition and was secured through a 50–50 Senate vote, with then–Vice President Kamala Harris casting the deciding vote.