President Donald Trump said Friday morning that he would terminate Federal Reserve Gov. Lisa Cook from her post "if she doesn't resign" over allegations that she claimed a secondary home was her primary residence in a 2021 mortgage application.
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"Yeah, I'll fire her if she doesn't resign, yeah," Trump said in response to a reporter's question fielded during a visit to the White House Historical Association exhibit in Washington Friday. "What she did was bad, so I'll fire her if she doesn't resign."
Trump's comments come days after Federal Housing Finance Agency Director Bill Pulte posted a screenshot of a criminal referral of Cook to the Department of Justice over allegations that she had claimed primary residence in mortgage applications for homes in Michigan and Atlanta, the latter of which she allegedly rented out. Trump said on social media that "Cook must resign, now!!!" on Wednesday.
Cook, who joined the Fed in 2022 and was nominated by President Joe Biden, said in a statement earlier in the week that she has "no intention of being bullied to step down from my position because of some questions raised in a tweet," adding that she will "take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts."
Pulte has made similar accusations against other prominent Democrats in recent weeks, including Sen. Adam Schiff, D-Calif., and New York Attorney General Letitia James. Schiff had served on the Select Committee to Investigate the January 6 Attack on the Capitol, and James had prosecuted Trump and his business associates for fraud related to inflating asset values in order to secure more favorable loan terms.
Members of the Federal Reserve Board of Governors serve staggered 14-year terms and are protected from removal by the president, except "for cause," a vague standard generally understood to relate to abuse of power or dereliction of duty. The President has never fired a Fed governor, so the precise contours of what qualifies as "cause" are unclear, but a Supreme Court's 1935 ruling in Humprey's Executor v. United States had long held that independent agency members cannot be removed for purely political reasons.
But the second Trump administration has embraced unitary executive theory, which holds that all executive power rests with the president and thus all executive subordinates serve at their will. Under that pretext, Trump has fired dozens of Democratic members of independent regulatory agencies since Trump took office in January, including members of the National Labor Relations Board, Equal Employment Opportunity Commission, National Credit Union Administration and others.
The Supreme Court has thus far been deferential to Trump's stance, finding that two fired Democrats on the NLRB and EEOC will remain off their posts pending the outcome of their appeals. In that statement, however, the high court also said that the circumstances of those officials' firing would not apply to the firing of a member of the Federal Reserve because the Fed "is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States."
Trump has exerted uncommon pressure on the Federal Reserve — and Fed chair Jerome Powell in particular — to set interest rates at his preferred level, insisting for months that the Fed should lower rates by several hundred basis points in part to save the government money on the interest it owes to its creditors. Trump and his lieutenants zeroed in on cost overruns related to ongoing renovations at the Federal Reserve headquarters as a possible premise for terminating Powell, leading the president to visit the Fed last month to inspect renovations.
John Heltman is the Washington Bureau Chief for American Banker, leading coverage of federal bank regulators, monetary policy and Capitol Hill. John,... Read full bio
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