Trump Dismisses Fed Governor Lisa Cook Over Fraud Allegations

U.S. President Donald Trump has formally dismissed Federal Reserve Board Governor Lisa D. Cook from her position, citing allegations of dishonesty and potential criminal misconduct. The announcement, made on August 19, 2025, came after weeks of public pressure and legal discussions over whether Trump had the authority to remove Cook without cause. In a signed document, Trump invoked the Second Amendment of the U.S. Constitution and the 1913 Federal Reserve Act—both of which have no bearing on executive removal authority—to justify the action. He accused Cook of “dishonest conduct in financial affairs” and potential involvement in criminal activities, including mortgage fraud [1].

The move followed a referral from the U.S. Department of Justice, which reportedly received a criminal investigation concerning Cook and is treating the matter with high priority. Trump’s ally, Federal Housing Finance Agency Director Bill Pulte, had previously sent a letter to Justice Department officials suggesting that Cook may have committed mortgage fraud, including forging bank documents to obtain more favorable loan terms [2].

Cook, a first-term governor and the first Black woman to serve on the Federal Reserve Board, became a focal point of a broader controversy involving several Democratic appointees. Despite repeated calls from Trump for her resignation, Cook remained in office until the final executive action. Trump had warned as early as August 8 that he would remove her if she did not step down first, and on August 22, he reiterated that he would take action if she failed to comply [3].

The removal has sparked significant debate over the politicization of the Federal Reserve. Critics argue that the institution, traditionally seen as independent from political influence, is now at risk of becoming a political tool. The National Economic Association has voiced strong support for Cook and other nominees to the Board, emphasizing their “uniquely and exceptionally qualified” backgrounds [4]. Meanwhile, analysts and media outlets have questioned the lack of publicly verifiable evidence supporting the allegations against her. The New York Post published an op-ed describing the claims as “patently false” and politically motivated [5].

The implications for the Federal Reserve remain unclear. As one of the seven Board members, Cook’s absence could influence policy decisions during a period marked by economic uncertainty and rising inflation. Diane Swonk, chief economist at Grant Thornton, called the backlash against Cook “pretty biased” and underscored the value of diverse perspectives in economic governance [6].

The controversy reflects a broader pattern of Trump’s efforts to reshape key economic institutions. However, experts warn that such actions could erode public trust in the Federal Reserve and the integrity of its decision-making process. The legal and political ramifications of Cook’s dismissal are likely to be closely monitored in the coming months.

Sources:

[1] U.S. President Trump Dismisses Federal Reserve Board Member Lisa D. Cook (https://www.binance.com/en/square/post/288133****7730)

[2] Trump Threatens To Fire Fed Governor Lisa Cook Over Mortgage Fraud Allegations (https://www.blacknews.uk/trump-threatens-to-fire-fed-governor-lisa-cook-over-mortgage-fraud-allegations)

[3] Trump Calls For Lisa Cook's Resignation Amid Mortgage Fraud Claims (https://www.essence.com/news/politics/trump-threatens-fire-fed-lisa-cook-mortgage-fraud/)

[4] Lisa Cook (https://www.nationalmemo.com/tag/lisa-cook)

[5] Hypocritical Dems Are Flouting Laws And Blaming Trump (https://nypost.com/2025/08/24/opinion/hypocritical-dems-are-flouting-laws-and-blaming-trump-they-are-missing-an-important-point-in-the-process/)