Trump calls on Federal Reserve official to resign after ally accuses her of mortgage fraud
FILE - Board of Governors of the Federal Reserve member Lisa Cook, speaks during a conversations with leaders from organizations that include nonprofits, small businesses, manufacturing, supply chain management, the hospitality industry, and the housing and education sectors at the Federal Reserve building, Sept. 23, 2022, in Washington. (AP Photo/Manuel Balce Ceneta, File)
WASHINGTON (AP) — President Donald Trump on Wednesday called on Federal Reserve governor Lisa Cook to resign after a member of his administration accused Cook of committing mortgage fraud, the latest example of the Trump administration’s efforts to gain control over the central bank.
Bill Pulte, director of the agency that oversees mortgage giants Fannie Mae and Freddie Mac, urged the Justice Department to investigate Cook, who was appointed to the Fed’s governing board by former president Joe Biden in 2022. She was reappointed the following year to a term that lasts until 2038.
Pulte, in a letter to Attorney General Pam Bondi, alleged that Cook has claimed two homes as her principal residences — one in Michigan, the other in Georgia — to fraudulently obtain better mortgage lending terms.
Pulte also charged in his letter that Cook has listed her condo in Atlanta, Georgia, for rent. Mortgages for homes used as principal residences typically carry lower interest rates than properties that are purchased to rent, Pulte’s letter said.
The allegation represents another front in the Trump administration’s attack on the Fed, which has yet to cut its key interest rate as Trump has demanded. If Cook were to step down, then the White House could nominate a replacement. And Trump has said he would only appoint people who would support lower rates.
The more members of the Fed’s governing board that Trump can appoint, the more control he will be able to assert over the Fed, which has long been considered independent from day-to-day politics.
Trump will be able to replace Chair Jerome Powell in May 2026, when Powell’s term expires. Yet 12 members of the Fed’s interest-rate setting committee have a vote on whether to raise or lower interest rates, so even replacing the Chair doesn’t guarantee that Fed policy will shift the way Trump wants.
All seven members of the Fed’s governing board, however, are able to vote on rate decisions. The other five voters include the president of the Fed’s New York branch and a rotating group of four of the presidents of the Fed’s other 11 regional branches.
Trump appointed two members of the Fed’s board in his first term, Christopher Waller and Michelle Bowman. Both dissented July 30 from the central bank’s decision to keep its rate unchanged in favor of a rate cut.
Another Fed governor, Adriana Kugler, stepped down unexpectedly Aug. 1, and Trump has appointed one of his economic advisers, Stephen Miran, to fill out the remainder of her term until January.
If Trump is able to replace Cook, the first Black woman to serve on the Fed’s board, as well as Kugler and Powell, that would give him a clear majority on the board of governors. Powell, however, could stay on the board after finishing his term as chair next May.
The Federal Reserve declined to comment on the accusation.
Trump has for months demanded that the Federal Reserve reduce the short-term interest rate it controls, which currently stands at about 4.3%. He has also repeatedly insulted Powell, who has said that the Fed would like to see more evidence of how the economy evolves in response to Trump’s sweeping tariffs before making any moves. Powell has also said the duties threaten to raise inflation and slow growth.
Trump says that a lower rate would reduce the government’s borrowing costs on $37 trillion in debt and boost the housing market by reducing mortgage rates. Yet mortgage borrowing costs do not always follow the Fed’s rate decisions.
The Trump administration has made similar claims of mortgage fraud against Democrats that Trump has attacked, including California Sen. Adam Schiff and New York Attorney General Letitia James.