Trump says Fed’s Lisa Cook is fired. Her lawyer (who’s repped Kushner, Trump families) vows to fight.

President Trump said today there is “sufficient cause” to fire Fed governor Lisa Cook for alleged mortgage fraud. But it may be more of a protracted fight.

Cook allegedly signed two owner-occupied loans within months of each other, and owner-occupied security instruments (called Deeds of Trust or Mortgages, depending on the state) for loans in the U.S. require a borrower to move into a residence within 60 days and live there for at least one year.

So it would seem impossible to do this with 2 properties within a year, which could support the president’s allegations.

However, there are lender-accepted scenarios that would allow for a borrower to sign 2 owner-occupied Deed of Trust/Mortgage commitments within the same year.

For example, if you just bought your own home with a loan, that could be one. And the second one could be if you co-signed on a different home loan for someone who’d be owner-occupying that home. This lender-accepted scenario is called a non-occupant co-borrower, and it’s common.

I don’t know Cook’s circumstances, but if there’s proof that 2 owner-occupied deeds of trust were knowingly signed in a year and no lender-approved exception is discovered, then this is unacceptable conduct.

But there’s lots for lawyers to sort through on whether it’s “sufficient cause” for firing under Fed rules, like:

Is it related to job duties?

Does it count as ’cause’ if it happened before the job started?

So the president has a point, but this looks like it’s going to be litigated.

Cook’s lawyer is Abbe Lowell, a defense attorney known for high-profile defendants, including Jared Kushner, Ivanka Trump, and Hunter Biden.

In a statement, Lowell said:

President Trump has taken to social media to once again ‘fire by tweet’ and once again his reflex to bully is flawed and his demands lack any proper process, basis or legal authority.

CNBC says this case could end up in front of the Supreme Court (link below).

If the White House prevails, it means they’re imminently filling 3 voting seats on the Federal Open Market Committee (FOMC) that sets rate policy.

Fed governor Adriana Kugler, after resigning August 8, will be replaced by Trump’s Council of Economic Advisors chair Stephen Miran. But his Fed appointment is only until January 31, as I explained here.

Putting Miran in temporarily buys the White House time to pick a permanent Kugler replacement, a potential successor for Fed chair Powell on or before May 2026, and now ostensibly a potential replacement for Cook.

As of last week, the White House had a list of 11 candidates to potentially replace Powell.

Below are more details on the Lisa Cook story from CNBC.

Please reach out with questions or comments.

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Reference:

– Trump tells Fed’s Lisa Cook she’s fired; she says ‘he has no authority to do so’ (CNBC)