Lisa Cook rejects Trump’s effort to fire her, calls mortgage issue an ‘inadvertent error’

WASHINGTON, DC: Federal Reserve Governor Lisa Cook on Wednesday, August 26, rejected the administration’s renewed effort to remove her from the central bank, arguing that President Donald Trump has no legal basis to fire her.

In a letter responding to the White House, Cook’s attorneys debunked allegations that she made false statements on mortgage applications and said any errors were purely unintentional.

The response came after the administration gave Cook a Wednesday deadline to address the allegations before Trump decides whether to pursue her removal.

Lisa Cook rejects mortgage fraud allegations

The White House has accused Cook of identifying two properties as primary residences on mortgage documents, a designation that can qualify borrowers for more favorable loan terms.

Cook has denied intentionally misleading lenders and said one of the properties was identified as a vacation home in some documents.

Her attorneys, Abbe Lowell and Norman Eisen, said the allegations do not establish grounds for her removal from the Federal Reserve Board.

“For the second time in a year, we have explained why there is no legal basis for President Trump to remove Governor Cook for cause,” her attorneys said.

“An inadvertent error is not fraud, as the President and a third of his cabinet should know because they reportedly did the same thing. These attacks on Governor Cook are not about real estate paperwork; they are an attempt by President Trump to force the Federal Reserve to bend to his will,” they added.

Lowell also said in the letter that the allegations were “untried and unproven” and that Cook had never committed mortgage fraud or intentionally engaged in wrongdoing.

The allegations were first raised last year by Federal Housing Finance Agency Director Bill Pulte, who referred the matter to the Justice Department.

Trump then announced that he was seeking to remove Cook.

Cook denied wrongdoing and challenged the effort in court.

The Supreme Court later ruled that she could remain in her position while the legal dispute proceeded, while leaving open the possibility that Trump could seek her removal again if he provided proper notice.

Trump’s Lisa Cook fight threatens Fed independence

The White House renewed the effort this month, telling Cook that Trump was considering removing her because there was “sufficient reason to believe that you made false statements on one or more mortgage agreements.”

The administration also argued that, even if the conduct did not amount to fraud, the alleged misstatements could raise questions about her judgment and trustworthiness.

The dispute has broader implications for the Federal Reserve, which sets US monetary policy independently of the White House.

Trump has repeatedly criticized the central bank for keeping interest rates too high and has pushed for faster rate cuts.

If Trump succeeds in removing Cook and appointing a replacement, his appointees could gain a majority on the Fed’s governing board.