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Trump fired Federal Reserve Governor Lisa Cook, citing FHFA director's pretextual mortgage fraud allegation

President Trump removed Federal Reserve Governor Lisa Cook on August 25, 2025, posting a termination letter to Truth Social citing his Article II authority and a "criminal referral" by Federal Housing Finance Agency Director William Pulte alleging Cook committed mortgage fraud before joining the Fed. The Federal Reserve Act permits removal of Board governors only "for cause," a provision designed to protect the central bank's independence from short-term political pressure. A federal court subsequently found Cook had made a strong showing that the removal violated the statute's cause requirement.

Jurisdiction
federal
Location
Washington, D.C.

Abuses documented

Actors

On August 25, 2025, President Trump posted a termination letter to Truth Social removing Federal Reserve Governor Lisa Cook "effective immediately," citing "my authority under Article II of the Constitution" and a criminal referral filed by Federal Housing Finance Agency Director William Pulte, who alleged Cook had improperly designated two homes as primary residences in 2021 to obtain better mortgage terms. The stated basis was conduct predating Cook's 2022 Senate confirmation to the Fed Board.

The Federal Reserve Act, 12 U.S.C. § 241, limits presidential removal of Board governors to "for cause." That restriction has been in place since 1935, enacted alongside the Fed's restructuring to protect monetary policy from short-term political intervention. Courts have interpreted "for cause" to require genuine performance failures or statutory violations in office — not pretextual allegations about pre-appointment personal finances sourced from a political appointee in an unrelated agency. Pulte, who directs the FHFA, is a Trump appointee with no investigative jurisdiction over the Fed; no law enforcement body brought the mortgage allegation. Cook is the first Black woman to serve on the Fed Board, appointed by President Biden in 2022.

On September 9, 2025, U.S. District Judge Jia Cobb issued a preliminary injunction blocking the removal, finding Cook had "made a strong showing that her purported removal was done in violation of the Federal Reserve Act's 'for cause' provision." Trump subsequently escalated the case to the Supreme Court.

Why we recorded this

The Federal Reserve Act limits removal of Fed governors to "for cause," a provision enacted in 1935 to insulate monetary policy from political interference. Courts have long interpreted "for cause" to require genuine performance failures or misconduct related to Fed duties — not pretextual allegations sourced from a political appointee in an unrelated agency. When the President removed Governor Cook using a mortgage allegation from before her appointment, cited by an FHFA director who reports to him, he substituted political access for the statutory standard Congress wrote. A U.S. district court subsequently found she had made a "strong showing" that the removal violated the Federal Reserve Act.

Sources

  1. Trump says he's removing Fed governor Lisa Cook, citing his administration's allegations of mortgage fraud — NBC News primary accessed June 23, 2026
  2. Trump seeks to fire Fed governor Lisa Cook — but a legal fight looms — NPR secondary accessed June 23, 2026

See also