WashingtonIn the latest attempt by the Trump administration to seize control of the central bank, President Donald Trump called on Federal Reserve Governor Lisa Cook to step down on Wednesday after Cook was accused of mortgage fraud by a member of his administration.
Cook, who was named to the Fed’s governing board by former President Joe Biden in 2022, was asked to be investigated by the Justice Department by Bill Pulte, chief of the organization that regulates mortgage giants Fannie Mae and Freddie Mac. The next year, she was reappointed to the longest remaining term of the seven governors, which ends in 2038.
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In 2021, Cook falsely identified two houses as her primary residences in order to get better mortgage lending terms, according to a letter Pulte wrote to Attorney General Pam Bondi. According to the letter, she bought a house in Ann Arbor, Michigan, on June 18 of that year, and two weeks later, she acquired a condo in Atlanta, Georgia.
Additionally, Cook has put her condo in Atlanta, Georgia, for rent, according to Pulte. The letter stated that mortgage interest rates for primary houses are generally lower than those for rental properties.
Regarding the charge, the Federal Reserve chose not to comment. A representative for the Justice Department also chose not to comment.
The accusation is part of the Trump administration’s ongoing assault on the Federal Reserve, which has yet to lower its key interest rate in response to Trump’s demands. The White House could designate a replacement if Cook resigned. Additionally, Trump has stated that he will only name individuals who support reduced rates.
Trump will have more authority over the Fed, which has long been seen as separate from daily politics, the more members he can select to the Fed’s governing board.
When Chair Jerome Powell’s term ends in May 2026, Trump will have the opportunity to take his place. However, even changing the chair does not ensure that Fed policy would change in the direction Trump desires because the Fed’s interest-rate-setting committee has a vote of 12 members on whether to raise or cut interest rates.
However, Trump would have more control over the organization if he appointed additional board members. When it comes to setting interest rates, all seven members of the Fed’s governing board can vote. The president of the Fed’s New York branch and four of the presidents of the Fed’s other eleven regional branches alternately make up the remaining five voters.
During his first term, Trump selected Michelle Bowman and Christopher Waller to the Fed’s board. Both rejected the central bank’s July 30 decision to maintain its current rate in favor of a rate reduction.
After Adriana Kugler, another Fed governor, abruptly resigned on August 1, Trump named Stephen Miran, one of his economic advisers, to serve out the rest of her term until January.
Trump would have a definite majority on the board of governors if he could replace Kugler and Cook, the first Black woman to serve on the Fed’s board. Trump will be able to replace a fifth position on the board if Powell steps down when his tenure as chair concludes in May of next year. However, after Powell’s time as chair ends, he may remain on the board until early 2028.
The boards of directors of the regional Federal Reserve banks choose their presidents, but the Fed’s board of governors must approve their choices. All 12 regional Fed presidents have expiration dates in February of next year.
For several months, Trump has insisted that the Federal Reserve lower the 4.3% short-term interest rate it oversees. Powell, who has stated that the Fed wants to see more proof of how the economy changes in reaction to Trump’s broad tariffs before taking any action, has also been regularly insulted by him. Powell has also stated that the levies could hinder development and increase inflation.
According to Trump, a lower rate would lessen the cost of borrowing for the government’s $37 trillion in debt and improve the housing market by lowering mortgage rates. However, the cost of borrowing money for a mortgage does not always follow the Fed’s rate decisions.
Similar allegations of mortgage fraud have been made by the Trump administration against Democrats Trump has targeted, such as Attorney General Letitia James of New York and Senator Adam Schiff of California.
