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WASHINGTON — President Donald Trump has dismissed Federal Reserve Governor Lisa Cook over allegations of mortgage fraud, marking the first time a sitting member of the Fed’s Board of Governors has been removed by a U.S. president. The move has sparked legal and political controversy, with experts warning the dismissal may face court challenges.
Cook, appointed in 2022 and the first Black woman to serve on the Fed board, was accused of listing two properties as primary residences to secure favorable loan terms. The allegations were referred to the Justice Department by Federal Housing Finance Agency Director Bill Pulte, a Trump appointee. No formal charges have been filed, and Cook has denied wrongdoing.
In a statement, Cook said she would not be “bullied” into resignation and vowed to contest the dismissal. Legal scholars note that under the Federal Reserve Act, governors may only be removed “for cause,” a standard that typically requires substantiated misconduct. Critics argue that the firing was premature and politically motivated, given that the allegations remain unproven.
The decision comes amid heightened tensions between Trump and the central bank, including repeated threats to remove Fed Chair Jerome Powell over interest rate policy. Cook’s removal opens a third vacancy on the seven-member board, potentially allowing Trump to reshape the Fed’s leadership ahead of key monetary decisions.
The Federal Reserve has not commented on the dismissal. Judicial review of the president’s authority in this matter is expected.
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