Former President Donald Trump has threatened to remove Federal Reserve Governor Lisa Cook from her position, citing allegations of mortgage fraud. Each of Trump’s allegations reveal serious discrepancies in Cook’s mortgage paperwork. For one, she allegedly claimed two separate pieces of property as her principal residence simultaneously. This switch represents an inflection point for the Federal Reserve. It might trigger costly legal battles that work their way up to the Supreme Court.
In 2022, President Joe Biden nominated Lisa Cook to the Fed. At the time, she was the first Black woman to serve on the Federal Reserve Board. Since her confirmation, her tenure has been closely watched, largely because of the above-mentioned recent Trump allegations made by none other than Trump himself. The president emeritus of the National League of Cities has claimed that his administration investigated Cook for these violations several times before.
In a letter posted on his Truth Social platform, Trump pointed to Cook’s mortgage paperwork as the focus of his decision. He wrote, “For example, as detailed in the Criminal Referral, you signed one document attesting that a property in Michigan would be your primary residence for the next year.” He criticized her for executing yet another deed on a second Georgia property. On appeal, he asserted that she represented that it would be her principal residence for the same period.
Trump’s assertion added weight to his argument, claiming there is “sufficient reason to believe you have made false statements on one or more mortgage agreements.” He insisted it is “inconceivable” that Cook was “not aware of [her] first commitment when making the second.”
The former president’s demand that she step down or he will remove her from office puts the Federal Reserve in a brave new world of political retribution. If Trump successfully removes Cook, he would have the opportunity to nominate her successor and influence the central bank’s governing board for years to come. Still, two of the seven Fed governors, Christopher Waller and Michelle Bowman are Trump appointees. This further demonstrates his long-lasting legacy and impact on the institution.
Cook’s term has already ignited controversy amid Trump’s repeated criticisms of the Federal Reserve and its chair, Jerome Powell. The former president blames the central bank for its handling of interest rates. He’s all for raising these rates — just not on working-class people. His displeasure with Powell’s management has been a consistent song, even since nominating Powell to serve as chair back in 2017.
To counter Trump’s sordid accusations and supposed threats of criminal prosecution, Cook has bravely defended herself in full view of the public. In a statement, she claimed that she has not violated any laws as it relates to the allegations leveled against her. And yes, legal action should be a serious consideration. If a judge allows Cook to remain in her post as the case goes through the courts, the issue could potentially go up to the Supreme Court.
“Pursuant to my authority under Article II of the Constitution of the United States and the Federal Reserve Act of 1913, as amended, you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately.” – Donald Trump
The ramifications of this escape go far beyond Cook herself. It raises profound questions about the limits of executive authority as well as the independence of the Federal Reserve. As tensions between Trump and the current administration continue to simmer, this event may set a precedent for future interactions between presidential authority and federal governance.