Trump Removes Fed Governor Lisa Cook from Board

WASHINGTON, Aug. 26 (Reuters) - President Donald Trump announced on Monday that he is dismissing Federal Reserve Governor Lisa Cook from her position on the Fed’s Board of Governors, effective immediately. In a letter made public on social media, Trump cited “deceitful and possibly criminal conduct” related to mortgage applications as the basis for Cook’s removal.

Cook, a Biden appointee and the first Black woman to serve on the Federal Reserve board, has strongly denied all allegations of wrongdoing. In a statement released by the Federal Reserve, she said she “has no intention of being bullied” out of her post and is gathering information to respond to any legitimate inquiries regarding her financial history.

The White House move represents an unprecedented exercise of presidential authority over the independent central bank, prompting questions about the legal grounds for removing a Fed governor before the end of a fixed term. Typically, governors can only be removed “for cause,” and Cook’s term was scheduled to run until 2038.

Bill Pulte, director of the Federal Housing Finance Agency and a Trump appointee, referred Cook to the Justice Department last week, alleging she falsified documents in mortgage applications to secure more favorable terms. The White House cited Pulte’s referral as justification for the action.

The dismissal opens a vacancy on the Fed’s board and gives Trump the opportunity to nominate a successor aligned with his views on interest-rate policy. The move has drawn criticism from former Treasury Secretary Larry Summers, who warned that political pressure on the Fed threatens democratic norms and the institution’s independence.