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Federal Reserve Governor Lisa Cook is refusing to resign, after President Donald Trump said in a letter posted on Truth Social that she had been “removed” from her role, effective immediately.”

The extraordinary development has triggered a rare constitutional clash between the White House and the Fed, an agency that has long operated without fear or favor.

The president posted the letter addressed to Cook on Friday, five days after first demanding that she resign from her role on Truth Social.

In the letter to Cook, Trump, citing the U.S. Constitution and the Federal Reserve Act of 1913, said that he was empowered to remove governors of the Fed’s Board “for cause.” Trump said he had “found for cause sufficient reason to believe that you have made false statements on one or more mortgage agreements.”

“I have determined that faithfully enacting the law requires your immediate removal from office,” Trump wrote in his letter to Cook.

The alleged false statements that Trump cited in his letter against Cook originated from Bill Pulte, Trump’s appointee to an agency that regulates Fannie Mae and Freddie Mac. Pulte wrote in his letter to the Treasury Inspector General that Cook had claimed two primary residences – one in Ann Arbor and the other in Atlanta – in 2021 to receive a better mortgage rate.

He alleged that Cook applied for two mortgages from U.S. Bank in 2021 for two separate homes. Pulte, who is running for Congress, claimed that Cook falsely claimed to be the primary owner in Atlanta and the Ann Arbor, Michigan, home.

Appearing on Fox Business’ “Mornings with Maria,” Pulte placed the allegations in the starkest terms.

“It’s very odd to see people try to twist back way sideways and upside down to justify mortgage fraud,” Pulte said. “This is a very serious crime. Mortgage fraud carries up to 30 years in prison. 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. However, 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 submitted the criminal referral on August 15, alleging that Cook falsified bank documents and property records. The referral has not led to formal charges yet.

Cook, who served on the Federal Reserve Board, after Biden nominated her in 2022, quickly fired back, rejecting Trump’s claim that he had the authority to fire her from the job.

“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 sent to Fox News Digital.

Cook is being represented by lawyer Abbe Lowell, who is also the attorney for Hunter Biden, New York Attorney General Letitia James, Jared Kushner, and Ivanka Trump. In his response to Trump’s letter, Lowell was blunt.

“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,” Lowell said.

Lowell also revealed that a lawsuit would be filed on behalf of Cook to challenge the move by Trump formally.

“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 added.

Leading Democrats also rushed to Cook’s defense, with the chair of the Democratic National Committee attributing the move to Trump being “desperately looking for a scapegoat” to cover his back.

House Minority Leader Hakeem Jeffries, D-N.Y., Sen. Elizabeth Warren, D-Mass., and Rep. Jamie Raskin, D-Md., all came out with statements against Trump’s letter to Cook.

In a statement to Axios, Raskin said, “What an outrage and a scandal. This is the big one constitutionally.”

Warren decried the move in a statement as “an authoritarian power grab” and said that “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.”

Jeffries followed up and said in a statement: “To the best of our knowledge, there is not a shred of credible evidence that she has done anything wrong. And if he was looking for a federal official who has served with questionable ethics, he should look in the mirror. 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.”

The president’s move comes as he remains locked in a battle with the Federal Reserve and its chair, Jerome Powell, over rate hikes. Trump and his supporters have demanded that the central bank cut rates to reduce the government’s rising cost of servicing the national debt, which now stands at over $37 trillion.

The move has also created constitutional questions over the president’s power over the central bank. The Federal Reserve Act of 1913 permits the president to remove governors of its Board “for cause.” Legal experts say a move of such has to be clearly justified under the law.