President Trump cited Article II and the Federal Reserve Act of 1913 to inform Lisa Cook that she was removed from her position effective immediately, according to a White House rapid response team letter. Bill Pulte, head of the Federal Housing Finance Agency, alleged that Cook falsified bank documents and property records to secure more favorable loan terms, potentially committing mortgage fraud. The action transforms the theoretical possibility of firing Federal Reserve governors into a real test of legal limits. The Federal Reserve Act permits removal for cause, but it is unclear whether years-old mortgage application details meet that threshold. The political and institutional consequences remain uncertain.
Zoom out: Trump cited Article II of the Constitution and the Federal Reserve Act of 1913 to tell Cook she was "removed" from her position, "effective immediately," according to a letter the White House rapid response team shared on X. Bill Pulte - the head of the Federal Housing Finance Agency, who has been among the most outspoken among Trump officials about the Fed - alleged in a letter earlier this month that she "falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud."
The big picture: Trump's action turns what has been a theoretical - that he might seek to test the limits of the law by firing Fed governors, rather than just pressuring them - into a reality. It has never happened before, so no one knows how any wrangling over the legality of firing Cook will play out, nor what it will mean for the Fed in the meantime.
The Federal Reserve Act allows the president to fire a Fed governor for cause, but it is unclear whether the fine details of years-old mortgage applications from before Cook became a governor are sufficient. Flashback: The Trump administration has overseen a huge wave of high-profile military retirements and removals. Go deeper: Democrats erupt as Trump moves to fire Fed governor Lisa Cook
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