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Federal Reserve Governor Lisa Cook is refusing to resign after President Donald Trump claimed in a letter that he had “removed” her from office “effective immediately.” The standoff between the former president and Cook is unprecedented, prompting a constitutional battle over the presidency and the Federal Reserve.

Trump posted the letter on Truth Social after first calling for Cook’s resignation on the same platform five days prior. Trump wrote in the letter that he was authorized by the U.S. Constitution and the Federal Reserve Act of 1913 to remove members from the Fed’s Board “for cause.” He claimed there was “sufficient reason to believe” that Cook “made false statements on one or more mortgage agreements.”

“The high character and integrity required by the statute to govern the conduct of the affairs of the United States is not something that you have displayed during your tenure, so I have determined that faithfully enacting the law requires your immediate removal from office,” Trump continued.

The president’s allegations against Cook are based on an official complaint filed by Bill Pulte, a Trump appointee of an agency that regulates Fannie Mae and Freddie Mac. Pulte, who appeared on Fox Business’ “Mornings with Maria,” accused Cook of lying about two primary residences in Ann Arbor and Atlanta in 2021 to secure better mortgage terms.

“This is a very serious crime,” Pulte said of the allegations. “Mortgage fraud can carry up to 30 years in prison. So, I believe the president has ample cause to fire Lisa Cook. Whether he wants to do that or not is entirely up to the president. But we will go where mortgage fraud is. If mortgage fraud is with Republican or Democrat, it doesn’t matter—if you commit mortgage fraud in President Trump’s America, we’re going to come after you. And Lisa Cook is no exception to that.”

Pulte filed a criminal referral on August 15 with the Justice Department, alleging that Cook made false statements on bank documents and property records. The referral has not been used to file charges.

Cook was appointed to the Federal Reserve Board in 2022 by then-President Joe Biden. She quickly dismissed Trump’s letter, arguing that the president has no right to remove her. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022,” Cook said in a statement obtained by Fox News Digital.

Cook is represented by attorney Abbe Lowell, who previously represented Hunter Biden, New York Attorney General Letitia James, Jared Kushner, and Ivanka Trump. In a statement to Truth Social, Lowell criticized Trump’s letter and demanded that he drop the investigation. “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. We will take whatever actions are needed to prevent his attempted illegal action,” the attorney said.

Lowell then said he would be filing a lawsuit on behalf of Cook to challenge Trump’s removal on formal legal grounds. “President Trump has no authority to remove Federal Reserve Governor Lisa Cook. His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” he said.

Democrats Speak Out Against Trump’s ‘Illegal’ Action

Several top Democrats also condemned Trump’s actions as unconstitutional and politically motivated. House Minority Leader Hakeem Jeffries, D-N.Y., Sen. Elizabeth Warren, D-Mass., and Rep. Jamie Raskin, D-Md. All released statements were critical of Trump.

Raskin told Axios, “What an outrage and a scandal. This is the big one constitutionally.”

Warren called Trump’s action “an authoritarian power grab” and an attempt to shift the blame for his own shortcomings. “Trump is desperately looking for a scapegoat to cover for his own failure to lower costs for Americans, and firing Lisa Cook is his latest move,” the Massachusetts senator said.

Jeffries also disputed the merits of Trump’s allegations, saying there was “not a shred of credible evidence that she has done anything wrong.” He added, “To the extent anyone is unfit to serve in a position of responsibility because of deceitful and potentially criminal conduct, it is the current occupant of the White House. The American people are not buying your phony projection and slander of a distinguished public servant.”

Trump has also been at odds with Federal Reserve Chair Jerome Powell over interest rates. Trump and his supporters want Powell and the Fed to lower interest rates to stimulate the economy and reduce the interest cost on the national debt, which currently exceeds $37 trillion.

The Showdown May Test Legal Boundaries of Fed Independence

While the Federal Reserve Act of 1913 does give the president the authority to remove members of the Fed’s Board “for cause,” legal experts say it must be justified by “a clear and lawful cause” rather than political motivations, something Trump’s critics say he has not provided.

Cook has refused to resign, and Lowell has promised to file a lawsuit against Trump for his “illegal” actions. With the Democratic Party lining up behind Cook and refusing to accept Trump’s rationale for his removal, the battle over Cook’s future may be far from over and could potentially see new legal precedents.