President Donald Trump on Wednesday called on Federal Reserve Governor Lisa Cook to resign on the basis of allegations made by one of his political allies about mortgages she holds in Michigan and Georgia, intensifying his effort to gain influence over the U.S. central bank.
Trump has also told aides he is considering attempting to fire her, the Wall Street Journal reported on Wednesday, citing a senior White House official and another person familiar with the matter. Reuters could not immediately verify the report. U.S. Federal Housing Finance Agency Director Bill Pulte alleged in a post on X earlier on Wednesday that Cook had designated a condo in Atlanta as her primary residence after taking a loan on her home in Michigan, which she also declared as a primary residence.
Pulte told CNBC he is also probing property Cook has in Massachusetts. Loans for a primary residence can carry easier terms than those for second homes or investment properties. Pulte said the loans in question date to mid-2021, before Cook was appointed to the Fed by former President Joe Biden and confirmed by the Senate the following year. Cook, a native of Georgia, was an economics professor at Michigan State University at the time the mortgages were taken out.
Pulte asked U.S. Attorney General Pam Bondi to investigate, and Trump quickly amplified the allegation. The Justice Department is taking the matter very seriously, a department official told Reuters.
Spokespersons for the Fed and for Cook did not immediately respond to a request for comment.
Cook's federally filed financial disclosure documents show three mortgages taken out in 2021, including a 15-year 2.5% loan on an investment property and two loans for personal residences, including a 30-year 3.25% mortgage and a 15-year 2.875% mortgage. The weekly average rate for 30-year loans during 2021 ranged between 2.9% and 3.3%, Mortgage Bankers Association data shows. Cook started at the Fed in 2022 and was reappointed to a 14-year term in 2023.
"Cook must resign, now!!!" Trump wrote in a post on his social media platform, his latest remarks aimed at reshaping the U.S. central bank, a body designed to set benchmark interest rates independent of White House influence.
The Trump administration has used mortgage fraud investigations to go after a number of other political enemies, including Democratic New York State Attorney General Letitia James, who brought a civil fraud case against Trump for lying about his net worth to obtain his own favorable bank loans as he built his real estate empire. That case resulted in a $355 million judgment against Trump last year, which the president is appealing.
Earlier this summer, Pulte asked the Justice Department to investigate alleged mortgage fraud by Democratic U.S. Senator Adam Schiff, who ran the House of Representatives' 2019 impeachment trial against Trump. James and Schiff have both denied wrongdoing.
The person, who spoke on condition of anonymity, compared some of the fraud claims to flaws in the civil fraud case that James brought against Trump, noting that the bank never gave him credit for a condo which he allegedly overvalued.
It also is not really clear if a person needs to live in the property for it to be counted as a primary residence, the person added. "Mortgage fraud is really about deceiving the banks to get a better loan," the person. "If the bank knows all of the relevant facts, you don't have a good case." Cook is one of three Biden appointees to the Fed whose terms extend beyond Trump's time in office, complicating the president's efforts to get more control by appointing a majority of its seven-member Board of Governors. Two of the Fed's remaining six board members were appointed by Trump - Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman.
Trump has repeatedly blasted Fed Chair Jerome Powell over benchmark interest rates that he wants sharply reduced, calling for his resignation while acknowledging that the Fed's unique status in U.S. governance prevents him from firing its board members over monetary policy disputes. The president can name a new Fed chief when Powell's term ends in May, but claiming a majority on the board may take more time.
Powell could continue serving as a Fed governor until 2028, near the end of Trump's term. Until Powell's departure, Trump has only one other seat to fill, the one vacated recently through the surprise resignation of former Fed Governor Adriana Kugler. Earlier this month, Trump nominated Council of Economic Advisers Chair Stephen Miran to serve out the rest of her term.
Trump has also told aides he is considering attempting to fire her, the Wall Street Journal reported on Wednesday, citing a senior White House official and another person familiar with the matter. Reuters could not immediately verify the report. U.S. Federal Housing Finance Agency Director Bill Pulte alleged in a post on X earlier on Wednesday that Cook had designated a condo in Atlanta as her primary residence after taking a loan on her home in Michigan, which she also declared as a primary residence.
Pulte told CNBC he is also probing property Cook has in Massachusetts. Loans for a primary residence can carry easier terms than those for second homes or investment properties. Pulte said the loans in question date to mid-2021, before Cook was appointed to the Fed by former President Joe Biden and confirmed by the Senate the following year. Cook, a native of Georgia, was an economics professor at Michigan State University at the time the mortgages were taken out.
Pulte asked U.S. Attorney General Pam Bondi to investigate, and Trump quickly amplified the allegation. The Justice Department is taking the matter very seriously, a department official told Reuters.
Spokespersons for the Fed and for Cook did not immediately respond to a request for comment.
Cook's federally filed financial disclosure documents show three mortgages taken out in 2021, including a 15-year 2.5% loan on an investment property and two loans for personal residences, including a 30-year 3.25% mortgage and a 15-year 2.875% mortgage. The weekly average rate for 30-year loans during 2021 ranged between 2.9% and 3.3%, Mortgage Bankers Association data shows. Cook started at the Fed in 2022 and was reappointed to a 14-year term in 2023.
"Cook must resign, now!!!" Trump wrote in a post on his social media platform, his latest remarks aimed at reshaping the U.S. central bank, a body designed to set benchmark interest rates independent of White House influence.
The Trump administration has used mortgage fraud investigations to go after a number of other political enemies, including Democratic New York State Attorney General Letitia James, who brought a civil fraud case against Trump for lying about his net worth to obtain his own favorable bank loans as he built his real estate empire. That case resulted in a $355 million judgment against Trump last year, which the president is appealing.
Earlier this summer, Pulte asked the Justice Department to investigate alleged mortgage fraud by Democratic U.S. Senator Adam Schiff, who ran the House of Representatives' 2019 impeachment trial against Trump. James and Schiff have both denied wrongdoing.
FED BOARD COMPOSITION
While the Justice Department will review the mortgage fraud referrals, being able to prove criminal liability is going to be a challenge, a person familiar with the matter told Reuters. One of the challenges lies in the fact that in many instances, even if a person wrongfully claims a home to be a primary residence, the mortgage company is often aware of all the facts and does not believe the home is being used as such.The person, who spoke on condition of anonymity, compared some of the fraud claims to flaws in the civil fraud case that James brought against Trump, noting that the bank never gave him credit for a condo which he allegedly overvalued.
It also is not really clear if a person needs to live in the property for it to be counted as a primary residence, the person added. "Mortgage fraud is really about deceiving the banks to get a better loan," the person. "If the bank knows all of the relevant facts, you don't have a good case." Cook is one of three Biden appointees to the Fed whose terms extend beyond Trump's time in office, complicating the president's efforts to get more control by appointing a majority of its seven-member Board of Governors. Two of the Fed's remaining six board members were appointed by Trump - Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman.
Trump has repeatedly blasted Fed Chair Jerome Powell over benchmark interest rates that he wants sharply reduced, calling for his resignation while acknowledging that the Fed's unique status in U.S. governance prevents him from firing its board members over monetary policy disputes. The president can name a new Fed chief when Powell's term ends in May, but claiming a majority on the board may take more time.
Powell could continue serving as a Fed governor until 2028, near the end of Trump's term. Until Powell's departure, Trump has only one other seat to fill, the one vacated recently through the surprise resignation of former Fed Governor Adriana Kugler. Earlier this month, Trump nominated Council of Economic Advisers Chair Stephen Miran to serve out the rest of her term.
