Questions about Cook’s mortgages were first raised in August by William Pulte, a Trump appointee who is the director of the Federal Housing Finance Agency. Pulte referred the matter to Attorney General Pamela Bondi for investigation.
Cook took out the mortgages in Michigan and Georgia in 2021 when she was an academic. An official financial disclosure form for 2024 lists three mortgages held by Cook, with two listed as personal residences. Her filing shows the rates she paid were higher than national averages at the time.
Loans for primary residences can carry lower rates than mortgages on investment properties, which are considered riskier by banks.
Some experts have questioned whether transactions that preceded Cook’s appointment to the Fed and were in the public record when she was vetted and confirmed by the US Senate could amount to adequate cause to remove her.
The Trump administration could also argue that giving Fed governors any protections from removal violates the president’s broad constitutional powers to control the executive branch, as it has in lawsuits filed by other ex-officials.
Trump in an Aug 25 letter to Cook accused her of having engaged in “deceitful and criminal conduct in a financial matter” and said he did not have confidence in her integrity.
Cook’s departure would allow Trump to name his fourth pick to the Fed’s seven-member board. The Senate Banking Committee is expected next month to consider Trump’s nomination of Stephen Miran, the head of the White House’s Council of Economic Advisers, to fill the only current vacancy on the board. The White House wants him confirmed in time to vote at the Fed’s Sep 16-17 policy meeting.
The president has repeatedly berated Fed Chair Jerome Powell for not lowering rates and over his alleged mishandling of a multibillion-dollar renovation project, though he has halted threats to remove Powell before his term as central bank chief ends in May.
Cook, who remains in her job for now, has consistently voted with the Fed’s majority
The Trump administration has also targeted political opponents, including US Senator Adam Schiff and New York Attorney General Letitia James, with similar accusations of mortgage fraud. Schiff and James have denied wrongdoing.
The lawsuit was assigned to Judge Jia Cobb, a Biden appointee. Analysts said the case could set a precedent shaping the balance of power between the White House and the Fed for years to come.
