Trump Boots Lisa Cook, Fed’s First Black Woman Governor, But She Won’t Back Down

Donald Trump says he has fired Federal Reserve Governor Lisa Cook over allegations she committed mortgage fraud four years ago.

Trump posted a letter addressed to Cook on Truth Social on Monday, stating she had been fired “effective immediately.”

It is the first instance of a U.S. president firing a governor in the history of the central bank, which has been an independent entity for 111 years.

Cook, the first Black woman to serve as a Fed governor, released a statement hours later saying Trump has no legal 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,” Cook said in a statement to CNN.

“I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”

It is unclear if Trump does have the authority to fire Cook.

The U.S. president can fire governors of the central bank if there is cause, but details on what constitutes cause are not explicitly defined.

Generally, “for cause” is interpreted as wrongful conduct, neglect of duty, or gross misconduct.

“This is not the DOJ opening anything, they haven’t charged her. So as of right now, I think it’s kind of questionable for cause,” former federal prosecutor Shan Wu told CNN. “It’s definitely gonna get litigated.”

Trump’s attempt to fire Cook relates to allegations that she signed mortgage documents identifying her Michigan home as her primary residence on June 18, 2021.

It is alleged that two weeks later, on July 2, 2021, she purchased a condo in Atlanta and also identified it as her primary residence.

Federal Housing Director Bill Pulte referred Cook to the Department of Justice (DOJ) over alleged mortgage fraud.

Cook faced calls to resign over the allegations but said in a statement she had no intention of stepping down.

“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” she said in a statement.

“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.”

Senator Elizabeth Warren, Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, decried Trump’s attempt to fire Cook.

“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,” Warren said.

“It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and any court that follows the law will overturn it.”

In Trump’s letter to Cook, he wrote: “I have determined that there is sufficient cause to remove you from your position.”

“In light of your deceitful and potentially criminal conduct in a financial matter … I do not have such confidence in your integrity. At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” Trump added.

Cook was appointed by former President Joe Biden and confirmed by the Senate in May 2022 to a term that expires in 2038.

Trump’s attempt to fire her comes as he is increasingly frustrated with the central bank for refusing to cut interest rates.

He has repeatedly threatened to fire Fed Chair Jerome Powell and has sharply criticized his refusal to cut short-term interest rates.

Trump further accused Powell of mismanaging renovations at the Federal Reserve.

Powell, who has refused to cut rates based on the uncertainty surrounding tariff impact on inflation and employment, last week hinted there could be an interest rate cut in September.

If Cook does need to leave her position, Trump could seize more power over the politically independent Fed by appointing someone to her role.

Alan Blinder, a former vice chair at the Fed, expressed concern over the implications of Trump’s move.

“The bigger picture is sadly simple: The Fed is designed to be independent of politics, for very good reasons,” Blinder told CNN.

“He is trying to end that and make it an arm of the Trump administration, which will be very bad for monetary policy if it happens.”

The allegation of Cook committing mortgage fraud is the latest move made by the Trump administration to pursue his perceived political enemies.

Earlier this month, Pulte also referred Democratic Senator Adam Schiff—a vocal Trump critic—to the DOJ over allegations of mortgage fraud.

New York Attorney General Letitia James has also been accused of mortgage fraud.

James launched several lawsuits against Trump, with the most recent filed against his administration in July for attempts to cut lifesaving health, education, and social service programs for low-income families.

In 2022, James also brought a civil fraud case against Trump, alleging he had fraudulently inflated his assets to obtain better loan and insurance terms.

A judge ruled that Trump had engaged in repeated fraud and he was ordered to pay a fine. There is an appeal in that case.

Both Schiff and James deny the allegations against them, describing them as politically motivated.