Posted on 08/30/2025 11:48:18 AM PDT by Angelino97
On Monday, President Donald Trump moved to fire Lisa Cook, a Biden-nominated member of the Federal Reserve’s Board of Governors. He moved to fire Cook for “cause,” and that cause is clear enough: According to William Pulte, director of the Federal Housing Finance Agency, Cook allegedly committed mortgage fraud by lying about her principal place of residence for purposes of securing more favorable interest rates—and then failed to report her rental income from the properties, to boot.
Trump’s move is the first time a president has ever tried to fire a Fed governor for cause, and Trump’s usual detractors have criticized him for his latest perceived violation of institutional norms. But Trump has acted appropriately; he is fully within his constitutional and statutorily delegated authority to remove Cook—whether for “cause” or not.
Let’s return to first principles.
The modern administrative state operates as a fourth branch of government, unmoored from direct political accountability. Its very existence, to say nothing of its present metastasis, is in irreconcilable tension with the American Founders’ vision of a clearly delineated tripartite separation of powers between Congress, executive branch and judiciary.
Article II of the Constitution vests the entirety of the “executive power” in the hands of the president of the United States. And as Chief Justice William Howard Taft (himself a former president) made clear in Myers v. United States (1926), this includes the power to remove executive branch officers. While the New Deal-era case Humphrey’s Executor v. United States (1935) carved out a dubious exception for so-called independent agencies, constitutionalists have long understood Humphrey’s as an aberration in need of reversal.
Indeed, the Supreme Court has been chipping away at this edifice. In Seila Law v. Consumer Financial Protection Bureau (2020), the Roberts court held that Congress cannot insulate a lone executive officer—in that case, the director of the bureau—from at-will presidential removal. In Collins v. Yellen (2021), the court extended that logic even further, holding that restrictions on the president’s ability to remove the head of the FHFA are also unconstitutional.
It is true that in Trump v. Wilcox, a case from earlier this year in which the court green-lit Trump’s dismissal of a Biden-nominated member of the National Labor Relations Board, the court did opine that arguments about the legitimacy of for-cause removal provisions for labor board members do not necessarily implicate similar for-cause restrictions for members of the Fed’s Board of Governors. The court’s brief two-page order in Wilcox described the Fed as a “uniquely structured … entity.”
But is it? Or perhaps more precisely—can it legitimately be? Members of the Fed’s Board of Governors are appointed by the president and confirmed by the Senate. They exercise significant policymaking authority, affecting the economy, interest rates and the value of the dollar. That is executive power under any reasonable understanding of the term.
Even more to the point, if the Fed is not part of the executive branch such that the president is able to wield plenary removal power, then where exactly is it? Surely, the Fed is not part of Congress or the judiciary. The Wilcox order opines that the Fed “follows in the distinct historical tradition of the First and Second Banks of the United States,” but this analogy is specious.
The First and Second Banks of the United States didn’t actually serve modern central bank functions. And the Fed, birthed in 1913, was the brainchild of Woodrow Wilson, the godfather of the modern administrative state. Legally, the Fed is more analogous to the rest of the administrative state.
Ultimately, Trump must be able to fire members of the Fed’s Board of the Governors—or else the Fed is structured in an unconstitutional manner. There is no tenable middle ground here.
What about the relevant authorizing statute? The Federal Reserve Act of 1913, which brought the Fed into existence, sets staggered 14-year terms for governors and doesn’t expressly provide for at-will removal.
But it also doesn’t specify what constitutes a legitimate “cause” for a governor’s removal. Congress could have specified that “cause” requires, as Cook’s counsel Abbe Lowell now argues, a Fed governor to first be indicted or convicted of a crime. But Congress didn’t specify that.
“Cause” absent such specification is an inherently subjective criterion. And what could be more legitimate of a cause for removing a governor of the nation’s central bank—which is, among other things, the lender of last resort to the country’s financial institutions—than the alleged defrauding of financial institutions? The allegations raise serious concerns about the legitimacy of the Fed. It is in the national interest to preserve that legitimacy.
Let’s also not forget: Term length does not equal tenure protection. Saying governors serve “for 14 years” is not the same as saying they cannot be removed within that time period. Courts have made this distinction plenty of times before—consider, for instance, the (legitimate) 2017 dismissal of James Comey, who was less than four years into what was to have been a 10-year tenure as FBI director.
The lawsuits will come anyway. So be it. Those fights are worth having. Trump’s first term was plagued by internal sabotage from bureaucrats and agency officers who fancied themselves a coequal branch of government.
It is imperative that Trump’s second term not repeat that tragic mistake. And the first for-cause removal of a sitting Fed governor sends an unmistakable message: The American people, through their elected president, will once again take the reins of government.
During Cook’s confirmation process in 2022, Senator Bill Hagerty accused her of lying on her résumé, with some senators calling her “grossly unqualified” and criticizing her research on racial inequality and its economic impact.
Cook denied the allegations, and she was confirmed in a tie-breaking vote by then-Vice President Kamala Harris.
Mortgage fraud claims (2025): The more recent and prominent accusations are not about her academic record but about alleged mortgage fraud. In August 2025, a criminal referral was made by Federal Housing Finance Agency (FHFA) Director Bill Pulte, a Trump appointee. The referral alleged that Cook claimed two properties in Michigan and Georgia as her “primary residence” in 2021, before she was a Federal Reserve governor, potentially to secure more favorable loan terms.
That's Letitia James, I think. Cook signed two primary mortgage applications in two different states two weeks apart, and apparently has a separate second-house mortgage for a rental property in Massachussetts.
As of September 2025, Federal Reserve Governor Lisa Cook has been accused of mortgage fraud by the Trump administration, who is attempting to remove her from office. Cook has not been charged with any crime and has filed a lawsuit to block her firing, calling the allegations “unsubstantiated and unproven”. The outcome of the lawsuit and the credibility of the allegations are currently in question.
The allegations of mortgage fraud
Source of the accusations: The allegations came from Bill Pulte, the director of the Federal Housing Finance Agency (FHFA), a Trump appointee. He made a criminal referral to the Justice Department, claiming that Cook made false statements on mortgage applications for three different properties before she joined the Federal Reserve in 2022.
Specifics of the loans: The accusations focus on three mortgages Cook took out in 2021 when she was a professor at Michigan State University.
Michigan and Georgia properties: Pulte alleges that Cook designated both her Ann Arbor, Michigan, and Atlanta, Georgia, properties as her “primary residence” on mortgage applications submitted just two weeks apart. Lenders often provide more favorable terms for primary residences than for investment properties.
Cambridge property: For a condo in Cambridge, Massachusetts, Pulte’s referral noted that Cook indicated it would be a “second home” on a 2021 mortgage document but later disclosed it as a rental/investment property on federal ethics forms. Investment properties typically have higher interest rates.
Cook’s legal team has suggested that any discrepancies were “clerical errors” and that she did not benefit from them
-PJ
Someone who has that many “clerical errors” on the same exact kind of transaction
in multiple states must be a sad sack that has bad luck follow her wherever she goes.
Only God knows the number of “clerical errors” that followed her to the Federal Reserve.
I’ll take Obvious for $400 Alex
action.com
Cook has third home
The latest complaint alleges Cook took out a mortgage agreement on a condominium in Cambridge, Massachusetts for $361,000, claiming that the property was a second home. Pulte alleges that eight months later, however, Cook declared that she had earned between $15,000-$50,000 in rental income and declared it an investment property.Cook’s attorneys did not immediately respond to requests for comment. The Federal Reserve declined to comment.
President Donald Trump moved to fire Cook after the initial criminal referral, setting the stage for a contentious legal fight and escalating his battle with the central bank. Trump has hammered the Fed and its chair, Jerome Powell, to lower interest rates, and successfully ousting Cook would allow him to secure a majority on the central bank’s board of governors.
Cook, though, is seeking to block the move, filing a lawsuit in federal court on Thursday that labeled the president’s bid to oust her as “illegal” and casting it as a bid to seize control of the Fed. Her lawyers have also suggested that an unintentional “clerical error” may be behind the mortgage disputes in Pulte’s first criminal referral. The Department of Justice has already signaled plans to investigate Cook over the earlier referral.
Read more: Cook Signals ‘Clerical Error’ May Be Behind Mortgage Dispute
The latest Pulte referral also raises additional concerns about the Michigan and Georgia properties at the heart of the original referral. Pulte says that FHFA has reason to believe Cook’s Michigan property is “currently being used as a rental property,” and that she appears to have tried to rent the Georgia property despite calling it a “personal residence” in federal disclosures. He asks the Justice Department to investigate whether Cook has made “further potential criminal violations as well as material misrepresentations” in order to, among other things, “acquire and maintain her position as governor.”
Pulte has attacked Cook over social media in recent days. “No one is above the law,” he wrote on Thursday after she filed her lawsuit, posting a graphic that he said shows matching signatures on mortgage documents for the properties in Michigan and Georgia.
US District Judge Jia Cobb, an appointee of former President Joe Biden, has set a hearing for Friday on Cook’s request for a restraining order as she seeks to remain in her role.
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