Trump sacks Federal Reserve Governor over fraud

United States President Donald Trump has sacked Federal Reserve Governor Lisa Cook over alleged improprieties in obtaining mortgage loans.

Trump announced Cook’s removal on Monday, August 25, 2025.

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

Cook, appointed to the Fed board in 2022 by former United States President Joe Biden, has yet to provide a detailed account of the transactions since questions about them were raised last week by US Federal Housing Finance Agency Director William Pulte, who referred the matter to Attorney General Pamela Bondi for investigation.

Neither Cook nor the Fed had an immediate response to a request for comment.

Though the terms of Fed governors are structured so they outlast the term of a given president, with Cook’s term lasting until 2038, 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.

Legal scholars and historians said the thicket of issues that could be raised in a legal challenge would span questions around executive power, the Fed’s unique quasi-private nature and history, as well as whether anything Cook did amounted to cause for removal.

Peter Conti-Brown, a scholar of the Fed’s history at the University of Pennsylvania, noted that the mortgage transactions preceded her appointment to the Fed, and were in the public record when she was vetted and confirmed by the Senate.

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Conti-Brown told AFP: “These officials have been vetted by our President and our Senate, that means that all things that they had done during their times as a private citizen were already vetted.

“So the idea that you can then reach back, turn the clock backward and say, you know, all these things that have happened before now constitute fireable offenses from your official position is to me incongruous with the entire concept of ‘for cause’ removal.”

Trump in the letter accused Cook of having “deceitful and criminal conduct in a financial matter” and said he did not have confidence in her “integrity”.

“At a minimum, the conduct at issue exhibits the sort of negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” he said, claiming authority to fire Cook under Article 2 of the US Constitution and the Federal Reserve Act of 1913.

Cook had been defiant about continuing onward at the Fed after the issue first became public last week, with Trump calling for her to resign.

Cook said: “I have no intention of being bullied to step down from my position because of some questions raised in a tweet.

“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.”

The Star