US President Donald Trump has ordered the removal of Federal Reserve Governor, Lisa Cook, amid unproven claims of mortgage fraud, an unprecedented move that immediately raised fears for the central bank’s independence.
The allegations were raised last week by director of the Federal Housing Finance Agency Bill Pulte, who alleged Professor Cook had claimed two primary residences in 2021, one in Michigan and another in Atlanta.
Mr Pulte, who was appointed by Mr Trump this year, suggested Professor Cook had been trying to get better mortgage terms, as rates are often higher on second homes.
In a letter posted on social media on Monday night, Trump said Cook, one of the seven members of the Fed’s Board of Governors, was being sacked “effective immediately” in accordance with his powers under the US Constitution and the 1913 Federal Reserve Act.
Citing claims aired last week by the US federal mortgage regulator, Trump said there was “sufficient reason to believe you may have made false statements on one or more mortgage agreements”.
“The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and member banks,” Trump said in the letter, which was shared on his platform Truth Social.
“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve. In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and 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 said.
Professor Cook denied the allegations and said she would not step down.
“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 an emailed statement.
Her attorney, Abbe Lowell, said Mr Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal authority”.
“We will take whatever actions are needed to prevent his attempted illegal action,” he added.
Professor Cook was appointed to the Federal Reserve board by then-President Joe Biden in 2022 and is the first black woman to serve as a governor.
Her nomination was opposed by most Senate Republicans, and she was approved on a 50–50 vote with the tie broken by then-vice-president Kamala Harris.