Trump Presses Fed’s Cook to Quit After Mortgage Fraud Allegation

President Donald Trump called on Federal Reserve Governor Lisa Cookto resign after a staunch ally called for an investigation of the board member’s mortgages, intensifying his campaign on the central bank.

Federal Housing Finance Agency Director Bill Pulteurged Attorney General Pam Bondi to investigate Cook over a pair of mortgages, the latest in a series of moves by the Trump administration to increase legal scrutiny of Democratic figures and appointees. Cook was nominated to the Fed by former President Joe Biden.

Trump said Wednesday that Cook “must resign now,” citing Pulte’s allegations, while the FHFA head posted on social media that the accusations give Trump “cause to fire” her.

WATCH: President Donald Trump called on Federal Reserve Governor Lisa Cook to resign following a call for an investigation of the board member’s mortgages. Josh Wingrove reports.

Source: Bloomberg

The dollar declined, yields pared losses and gold rose after Trump’s call for Cook’s ouster.

Pulte wrote a letter to Bondi and Justice Department official Ed Martin on Aug. 15 suggesting that Cook may have committed a criminal offense. The letter, which was first reported by Bloomberg News, alleges that Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute.” The Justice Department has received the letter, according to an official, who declined to elaborate further.

Lisa Cook

Photographer: Ting Shen/Bloomberg

A resignation would create another opening for Trump to fill on the Fed board, potentially tipping the balance of Republican appointees to four of its seven members. The president has explicitly said that he’ll only pick a successor to Fed Chair Jerome Powell who agrees that borrowing costs should come down, a demand that has already raised questions about whether a new chair can credibly preserve the bank’s independence.

Trump’s administration has also pursued mortgage fraud allegations against high-profile Democrats, including California Senator Adam Schiff and New York Attorney General Letitia James. Both are longtime political foes of Trump.

The Cook referral expands that effort to the Fed, as Trump allies — including Pulte — press the US central bank to lower rates and Powell to resign before his term as chair expires in May.

Read More: Trump Versus Powell — How Far Can He Push the Fed Chair?

No charges have been filed and it’s not clear whether Bondi will investigate. The Justice Department declined comment. The Federal Reserve declined comment. Cook did not respond to requests for comment late Tuesday.

Pulte said Cook took a mortgage on a property in Ann Arbor, Michigan, signing an agreement that stipulated she would use the property as her primary residence for at least a year. Two weeks later, according to the letter, she took another mortgage on a Georgia property and also declared it would be her primary residence.

Pulte also called on Bondi to look into whether Cook misrepresented her circumstances by later listing the Georgia property for rental. The letter includes copies of mortgage documents in Cook’s name, as well as an apparent rental listing from 2022, a little over a year after she bought the Georgia property.

In an interview Wednesday on CNBC, Pulte said the referral to the Justice Department was based on publicly available information.

“You know, anybody can go look at these public documents,” Pulte said. “So you know, there’s no funny business there.”

Powell Pressure

Trump has put substantial pressure on Powell and the Fed to lower rates, tarnishing the chairman as “Too Late” in social media posts arguing the Fed should have started slashing rates months ago, while also heavily criticizing Powell and the Fed over its ongoing headquarters renovation project.

The documents in the referral show that Cook took a $203,000, 15-year mortgage on an Ann Arbor property in 2021. The document included a stipulation that she “shall occupy, establish and use the Property as Borrower’s principal residence within 60 days” and “for at least one year,” unless the lender, the University of Michigan Credit Union, agreed in writing. The document is dated June 18, 2021, and it’s not clear whether the lender agreed to or was aware of her subsequent purchase.

Then, on July 2, 2021, Cook took a separate, 30-year mortgage, for $540,000 on a property in Georgia, according to the referral. Her mortgage loan there, too, has an occupancy clause stating the borrower must make it a primary residence within 60 days and for at least one year.

In his letter to Bondi, Pulte alleges that Cook “appears to have acquired mortgages that do not meet certain lending requirements and could have received favorable loan terms under fraudulent circumstances.”

Pulte cited four criminal statutes for Bondi to investigate for potential charges.

Pulte also sent Bondi what appears to be a rental listing for the same Georgia unit, “indicating that the property was intended to be used as an investment/rental property, and not in fact a primary residence,” according to the letter.

Confirmation Battle

Cook took office in 2022, becoming the first Black woman to serve on the Fed’s board of governors. She was later nominated by Biden for a full term, which expires in 2038.

During her first confirmation process, Republican lawmakers and conservative media outlets accused her of misrepresenting parts of her resume — which she strongly denied — and tried to use that to sink her nomination. Cook was confirmed on a party-line vote in the Senate, with then-Vice President Kamala Harris stepping in to break the 50-50 tie.

Former Fed Governor Adriana Kugler resigned her position on Aug. 8, five months before her term was due to expire, without providing any explanation. Trump has nominated Stephen Miran, his Council of Economic Advisers chair, to fill the term through January.

Forcing another Fed governor out would create an additional opportunity for Trump to nominate someone who, like Miran, agrees with his push to lower rates.

Cook has expressed ongoing concern this year about inflation, which she said could be driven higher by tariffs, but has also been watchful of the labor market. Earlier this month, she called the July jobs report, which showed that hiring had meaningfully slowed, concerning.

(Updates with Pulte interview comments in 12th paragraph.)

--With assistance from Amara Omeokwe, Catarina Saraiva, Derek Wallbank and Katy O’Donnell.

To contact the reporter on this story:
Josh Wingrove in Washington at jwingrove4@bloomberg.net

To contact the editors responsible for this story:
Margaret Collins at mcollins45@bloomberg.net

Jordan Fabian, Christopher Condon

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