Federal Reserve Governor Lisa Cook denounces Trump’s mortgage fraud claims

Her legal team’s latest statement comes as Trump renews his efforts to push her out of her role, a manoeuvre widely viewed as an assault on the bank’s independence.

Under US law, Federal Reserve governors can only be removed “for cause”, and not for political reasons.

Trump has levelled accusations of mortgage fraud against Cook, a Democratic appointee, in a bid to meet the legal standard. But Cook’s lawyers, Abbe David Lowell and Norman Eisen, issued a letter on Wednesday offering a detailed rebuttal to the president’s allegations.

“For the second time in a year, we have explained why there is no legal basis for President Trump to remove Governor Cook for cause,” the lawyers said.

The letter serves as a response to a threat from the Trump administration this month.

In a message dated August 5, the White House warned that Trump, a Republican, was considering firing Cook “due to there being sufficient reason to believe that you made false statements on one or more mortgage agreements”. It gave her three weeks, until Wednesday, to respond.

This is the second time Trump has sought to use mortgage fraud allegations to remove Cook.

A year ago, in August 2025, he issued similar accusations, telling reporters, “I’ll fire her if she doesn’t resign.” Cook responded with a lawsuit that travelled all the way to the Supreme Court.

She claimed the allegations were a pretext for removing her over policy differences.

In a five-to-four ruling in June, the high court blocked Trump from firing Federal Reserve governors at will.

No president has attempted to oust a Federal Reserve official since the body was founded more than a century ago. The Federal Reserve Act of 1913 enshrined certain protections for the bank to shield it from outside influences that could damage the economy in the name of political gain.

Trump, however, has sought to significantly expand executive power during his second term as president.

The Federal Reserve has been one of his targets. He has sought to increase his influence over the bank, notably by pressuring its members to rapidly slash interest rates, which were elevated to combat inflation.

Experts, however, warn that lowering interest rates too quickly could flood US markets with cash, weakening the value of the dollar.

Interest rates were a point of contention with former Federal Reserve Chair Jerome Powell, whose tenure as the bank’s head ended in May. He remains a governor on its board.

In January, Powell revealed that the Trump administration opened a criminal probe into his actions related to a renovation effort at the bank’s headquarters.