Lisa Cook is an American economist who was sworn in as a member of the Federal Reserve Board of Governors in 2022. This made her the first Black woman to sit on the Board. She is considered an expert in international economics and was a professor of economics and international relations at Michigan State University, as well as a member of the Executive Committee of the American Economic Association. Her credentials made her qualified to be part of the Federal Reserve Board.
Allegations of Mortgage Fraud
However, on 25 August 2025, Donald Trump announced that he has fired her from the Board for what he claimed to be deceitful and potentially criminal conduct. The U.S. president said he had evidence Cook had made false statements in one or more mortgage agreements. This allegation is credited to Bill Pulte. Pulte is a Trump appointee who serves as the director of the Federal Housing Finance Agency. His agency also oversees Fannie Mae and Freddie Mac.
Pulte specifically accused Cook of making conflicting declarations about her primary residence back in 2021. The allegation involves a property in Michigan and another in Georgia. Pulte explained that this was intended to obtain more favorable mortgage terms. Trump noted that Cook first claimed that the Michigan property would serve as her primary residence, but then signed a separate agreement two weeks later stating the same about a property in Georgia.
Note that a mortgage application requires declaring a property as a primary residence, secondary home, or investment. Primary residences often qualify for lower interest rates, smaller down payments, and more favorable terms because lenders see them as less risky. Claiming more than one property as a primary residence is impossible by definition. Knowingly misrepresenting a property to secure better terms is considered mortgage fraud and a federal offense.
The allegation by Pulte was first made on 15 August 2025. He said he submitted a criminal referral to the Department of Justice. Trump, five days later, made a post on Truth Social calling for the resignation of Cook. The then Fed Governor refused the demand. She said she will not be pressed to vacate her post and promised to provide clear answers about the allegations and her financial records. Trump then announced on August 25 that he would be firing Cook.
Response From Cook and Observers
Cook responded with a statement noting that Trump purported to fire her for cause when no cause exists under the law. She added that the president has no authority to do so. Note that independent agencies in the U.S. have officials who cannot be removed by the president at will. These officials can only be removed for cause. This means misconduct or neglect. This legal standard is intentionally narrow to shield independent regulators from political retaliation.
It is also worth mentioning that members of the Board of Governors are appointed to 14-year terms and can only be removed by the president for cause under the Federal Reserve Act. Courts have historically interpreted “for cause” very strictly and beyond mere policy disagreements or political convenience. Cook and her legal team are arguing that Trump cannot remove her because the allegations about her mortgages have not been proven in any legal process.
The current Supreme Court has also ruled that the Federal Reserve is a quasi-private entity whose members are protected from political interference. These members cannot be treated like cabinet officials. Note that this has been the case for most central banks in the world. The nature of the institution is intended to balance public accountability with insulation from short-term politics and ensure that central bank leadership promotes the best interests of the nation.
Nevertheless, if the action of Trump stands, there will be corollaries. The firing of Cook without a legal basis could weaken the independence of the Federal Reserve and its Board of Governors. This will make governors vulnerable to removal for political reasons. However, if the courts declare the removal of Cook invalid, this decision will reaffirm and protect the long-standing legal basis and other legal precedent protecting the independence of regulators.