A Federal Reserve governor, Lisa Cook, says that she rejects President Trump’s recent move to oust her from her position for allegedly committing mortgage fraud and refuses to leave her post.

“President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she wrote in a statement emailed to the Associated Press after the president posted a copy of a letter sent to her on Monday. “I will not resign.”

Mr. Trump first announced his intentions Monday night in a post on his Truth Social account, highlighting an unprecedented move that marks an escalation in his push to exert greater control over the traditionally independent central bank.

He claimed that he was removing her from the post over allegations of mortgage fraud.  

“[T]here is sufficient reason to believe you may have made false statements on one or more mortgage agreements,” the president writes.

“You signed one document attesting that a property in Michigan would be your primary residence for the next year. Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year.”

He adds: “It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both.”

Ms. Cook appears ready to dispute Mr. Trump’s termination letter, retaining a prominent Washington attorney, Abbe Lowell.

“[His] reflex to bully is flawed and his demands lack any proper process, basis, or legal authority,” Mr. Lowell said to the AP. 

“We will take whatever actions are needed to prevent his attempted illegal action.”

The allegations against Ms. Cook were made last week by a Trump appointee to the agency that oversees Fannie Mae and Freddie Mac, Bill Pulte. He claims that Ms. Cook, in 2021, claimed homes at Ann Arbor and Atlanta as her primary residences to obtain better mortgage rates.

Ms. Cook is the first black woman to serve on the Fed’s board as a governor after being appointed by President Biden in 2022. Most Senate Republicans had opposed her appointment in a contentious confirmation process, only being nominated on a 50-50 vote after Vice President Kamala Harris broke the tie.

Mr. Trump’s move to remove Ms. Cook from the Federal Reserve is likely to create a legal battle that would likely make its way before the Supreme Court and potentially disrupt financial markets. 

If the president succeeds, the Fed could begin to lose its political independence, which is critical in the central bank’s ability to fight inflation.