US Fed’s Cook denies wrongdoing as Trump renews bid to fire her

Published Thu, Aug 27, 2026 · 08:45 AM

FEDERAL Reserve Governor Lisa Cook again denied unproven mortgage fraud allegations repeated by President Donald Trump as he considers whether to renew his effort to remove her, which likely launches another contentious legal battle over the central bank’s independence. 

In a letter sent to the White House on Wednesday (Aug 26), Cook’s lawyers called the allegations “unfounded and untrue.”

“Governor Cook has never committed mortgage fraud or any intentional wrongdoing, and there is no legally cognisable cause for removing her from the Federal Reserve Board,” according to the letter.

The White House did not have an immediate comment on Cook’s letter.

The latest back and forth comes several months after Trump narrowly lost his initial bid at the Supreme Court to oust Cook, part of a broader effort by the president and his allies to appoint members aligned with him on lowering interest rates. 

Cook has not faced criminal charges to date. The latest letter from White House personnel director Dan Scavino earlier this month repeated fraud accusations that Bill Pulte, director of the Federal Housing Finance Agency, initially made more than a year ago. Cook rebutted those allegations in a detailed letter to Justice Department officials in the fall. 

The Fed next holds its next regularly-scheduled policy meeting on Sept 15-16, and officials are divided on whether to leave rates unchanged or to raise them to counter elevated inflation.

Cook voted with the majority last month to keep the central bank’s short-term benchmark rate steady but said in an Aug 5 speech that she is “prepared to act” if inflation doesn’t slow.

Cook was appointed to the Fed in 2022 by former President Joe Biden and her term is set to expire in 2038.

In a 5-4 decision in June, the Supreme Court refused to let the president immediately fire Cook, finding that he failed to provide her with enough advance notice and an opportunity to respond to accusations of wrongdoing.

The justices in the majority defended a US law that provides Fed governors with protection against political interference by only allowing the president to remove them “for cause”, as opposed to any reason, known as “at will” removal.

The high court didn’t provide a detailed rubric for what might qualify as “cause”, however, leaving open the possibility that Trump could try again to fire Cook as long as he provided her with a chance to defend herself first.

Chief Justice John Roberts, who wrote the majority opinion, made clear that Trump’s stance that he could fire a member for “any concern” about their “conduct, ability, fitness, or competence” was too low of a bar. Roberts also rejected Cook’s position that “cause” was limited to conduct in office or being ineligible to serve. 

Cook’s lawyers said in a statement several weeks ago that they would challenge any new effort by the president to fire her based on “this latest pretext and preserve her position and the historic role of the Fed.”

The mortgage fraud accusations relate to properties in Michigan and Georgia that Cook bought or refinanced in recent years. Administration officials alleged that she may have fraudulently claimed multiple homes as a “principle” or “primary” residence and secured more favorable mortgage terms as a result.

Cook and her lawyers disputed that there was any evidence she intentionally provided false information or meant to deceive financial institutions. BLOOMBERG