Trump moves to fire Fed Gov Lisa Cook over claims of mortgage fraud
The United States (US) President Donald Trump has moved to fire a Governor of the Federal Reserve, Lisa Cook. The independent central bank official has said that Trump had neither cause nor authority.
Cook functions as one of seven members of the Fed’s Board of Governors, which grants her a position on the 12-member committee responsible for setting interest rates in the US.
Trump cited allegations of false statements on her mortgage agreements as cause for his decision against Cook.
“I have determined that there is sufficient cause to remove you from your position”, Trump wrote in a letter addressed to Cook, making reference to the Federal Reserve Act.
Cook has however refused to resign despite Trump saying in a letter that she was “removed” from her position “effective immediately”, saying the President has no cause.
“I will not resign. I will continue to carry out my duties to help the American economy,” she said in a statement shared by her attorney Abbe Lowell with US media.
Presidents of the United States have limited power over officials from the Central Bank, as a Supreme Court order has recently suggested that Fed officials can only be removed for “cause”.
Trump has however pointed to a criminal referral dated August 15 from the Federal Housing Finance Agency’s Director to the US Attorney General, which the US President said provided sufficient reason to believe that Cook might have made false statements on one or more mortgage agreements.
One of the alleged false statements was that Cook had claimed two primary residences, one in Michigan and another in Georgia.
In his letter on Monday, Trump said: “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’s effort to remove Cook may set off a long legal battle, as she could be allowed to remain in her position during the litigation period.
Cook had earlier said in a statement that she had “no intention of being bullied to step down,” but willing take questions about her financial history seriously.
Cook was sworn in as a member of the Federal Reserve Board of Governors in 2022 and she is the first black woman to sit on the Board.
She has previously served on the Council of Economic Advisers under former President Barack Obama.
Some have considered Trump’s move against high-profile Democrats as political. According to them, the administration has continued to pursue allegations of mortgage fraud against its political adversaries.
