Fed Governor Lisa Cook Denounces Trump's Mortgage Fraud Claims; Lawyers Say There Is No Legal Cause to Remove Her

Lawyers for Federal Reserve Governor Lisa Cook issued a letter on Wednesday, 4 Shahrivar 1405 (August 26, 2026), offering a detailed rebuttal to the Trump administration's allegations, writing "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" and that "an inadvertent error is not fraud." According to Al Jazeera, the letter responded to an August 5 White House warning that had given Cook three weeks to respond to unproven mortgage-fraud allegations.

Trump first raised the allegations in August 2025 (Mordad 1404). Under the Federal Reserve Act of 1913, Fed governors can only be removed "for cause," not for political reasons, and serve 14-year terms; in June 2026 (Khordad 1405), the US Supreme Court, in a 5-4 ruling, blocked Trump's earlier attempt to fire Fed governors at will. The standoff continues alongside Trump's sustained push for rapid Federal Reserve interest-rate cuts, a path experts warn could weaken the dollar's value if pursued too quickly.