President Donald Trump said he was removing Federal Reserve Governor Lisa Cook, citing a criminal referral that alleges she made false statements on mortgage documents. Cook, who has not been charged with a crime, says the president has no authority to fire her, and her lawyer said she would challenge the move in court, since governors can be removed only “for cause.”
Trump moves to remove Fed Governor Lisa Cook over mortgage allegations
President Donald Trump said on August 25, 2025, that he was removing Federal Reserve Governor Lisa D. Cook from office, citing a criminal referral that alleges she made false statements on mortgage documents. In a letter he posted publicly, Trump wrote that Cook had signed two mortgages weeks apart, each listing a different home as her primary residence, and said the Federal Reserve Act allowed him to remove her. Cook’s lawyer, Abbe Lowell, said the move was unlawful and would be challenged in court.
The announcement drew criticism from economists and legal scholars, who noted that Fed governors serve fixed 14-year terms and, under the law, can be removed by the president only “for cause.” That standard is meant to protect the central bank’s independence from political pressure.
What Trump’s letter alleges
The letter cites a criminal referral from Federal Housing Finance Agency Director William J. Pulte to Attorney General Pam Bondi. It says Cook signed a mortgage on a property in Michigan in 2021, stating it would be her primary residence, and about two weeks later signed a mortgage on a property in Atlanta, Georgia, making the same claim. The letter argues that she could not have honored both commitments at once.
Loans for a primary residence often carry lower interest rates than loans for second homes or rental properties. Cook has not been charged with any crime, and the allegations have not been tested in court.
Cook’s response
In a statement, Cook said Trump “purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so.” She added: “I will not resign.”
A Federal Reserve spokesperson said the long, fixed terms of governors are an important safeguard and that the Fed would abide by any court decision on the matter. Cook filed a lawsuit against Trump on August 28, asking a federal court to block her removal.
Can a president fire a Fed governor?
The Federal Reserve Act says a governor may be removed by the president “for cause.” The law does not define the term, but it is generally understood to refer to serious misconduct, neglect of duty or inefficiency in office, not policy disagreements. No president had previously tried to fire a sitting Fed governor, so there is no direct court precedent.
The case raises two main questions: whether the alleged mortgage conduct, which predates Cook’s time on the Fed board, can count as cause, and whether she was given adequate notice and a chance to respond before the president acted.
Supreme Court removal cases
The Supreme Court has heard several cases on presidential power to fire officials at independent agencies, including the Federal Trade Commission and the Consumer Financial Protection Bureau. In a May 2025 order involving other agencies, the court signaled that the Federal Reserve may be treated differently, describing it as a uniquely structured entity with its own history.
Why it matters
The Fed’s structure is designed to keep decisions on interest rates insulated from day-to-day politics. Trump has repeatedly criticized Fed Chair Jerome Powell and pressed the central bank to cut rates faster. His supporters describe the action against Cook as an ethics matter. Critics, including many economists, say it threatens the Fed’s independence and could set a precedent for future presidents.
What happens next
A federal judge will decide whether Cook can remain in her seat while the case proceeds. If she is removed, the president could nominate a replacement, who would need Senate confirmation. The Fed’s policy-setting committee can continue to meet and vote in the meantime.
Until a court rules, the claims against Cook remain allegations, and her status depends on how judges interpret the law’s “for cause” standard.
Source: Al Jazeera
