Trump calls on Fed Governor Lisa Cook to resign over mortgage allegations

WASHINGTON – US President Donald Trump on Aug 20 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 US central bank.

Ms Cook said she had “no intention of being bullied to step down” from her position at the central bank after US Federal Housing Finance Agency Director William Pulte raised the allegations in a tweet.

“I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts,” she said in a statement.

Mr Trump has also told aides he is considering trying to fire Ms Cook, the first black woman to serve on the Fed board, The Wall Street Journal (WSJ) reported on Aug 20, citing a senior White House official and another person familiar with the matter. Reuters could not immediately verify the report.

The White House declined to comment on the WSJ report.

Mr Pulte alleged in a post on X earlier in the day that Ms Cook had designated a condominium in Atlanta as her primary residence after taking a loan on her home in Michigan, which she also declared as a primary residence. He told CNBC he is also probing property Ms Cook has in Massachusetts.

Loans for a primary residence can carry easier terms than those for second homes or investment properties.

Mr Pulte said the loans in question date to mid-2021, before Ms Cook was appointed to the Fed by former US president Joe Biden and confirmed by the Senate the following year.

Ms Cook, a native of Georgia, was an economics professor at Michigan State University at the time the mortgages were taken out.

Mr Pulte asked US Attorney-General Pam Bondi to investigate Ms Cook, and Mr Trump quickly amplified the allegation.

The US Justice Department is taking the matter very seriously, a department official told Reuters.

Democrats on the US House of Representatives Committee on Financial Services blasted Mr Trump’s attack on Ms Cook and vowed to fight it.

“Donald Trump is making up blatant lies in an effort to oust the first black woman to serve on the Federal Reserve Board, so he can replace her with another unqualified loyalist who will do his bidding,” they said in a post on X. “This is another attack on the Fed’s independence. We can’t let this happen.”

Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, echoed those concerns, saying in a statement: “The President and his administration should not weaponise the federal government to illegally fire independent Fed Board members.”

Ms Cook’s federally filed financial disclosure documents show three mortgages taken out in 2021, including a 15-year 2.5 per cent loan on an investment property and two loans for personal residences, including a 30-year 3.25 per cent mortgage and a 15-year 2.875 per cent mortgage.

The weekly average rate for 30-year loans during 2021 ranged between 2.9 per cent and 3.3 per cent, Mortgage Bankers Association data shows.

Ms Cook started at the Fed in 2022 and was reappointed to a 14-year term in 2023.

“Cook must resign, now!!!” Mr Trump wrote in a post on his social media platform, his latest remarks aimed at reshaping the US 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 Mr Trump for lying about his net worth to obtain his own favourable bank loans as he built his real estate empire.

That case resulted in a US$355 million (S$456.4 million) judgment against Mr Trump in 2024, which the US President is appealing.

Earlier this summer, Mr Pulte asked the US Justice Department to investigate alleged mortgage fraud by Democratic US Senator Adam Schiff, who ran the House of Representatives’ 2019 impeachment trial against Mr Trump. Ms James and Mr Schiff have both denied wrongdoing.

Fed board composition

While the US Justice Department will review the mortgage fraud referrals, proving criminal liability will be a challenge, a person familiar with the matter told Reuters.

One challenge is 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 Ms James brought against Mr Trump, noting that the bank never gave him credit for a condominium which he allegedly overvalued.

It also is not 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.”

Ms Cook is among three Biden Fed appointees whose terms extend beyond Mr Trump’s time in office, complicating the US President’s efforts to gain 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 Mr Trump – Governor Christopher Waller and vice-chairwoman for supervision Michelle Bowman.

Mr Trump has repeatedly criticised US Fed chairman Jerome Powell over benchmark interest rates that he wants sharply reduced, calling for his resignation while acknowledging that the Fed’s unique status in US governance prevents the US President from firing its board members over monetary policy disputes.

The US President can name a new Fed chief when Mr Powell’s term ends in May, but claiming a majority on the board may take more time. Mr Powell could continue serving as a Fed governor until 2028, near the end of Mr Trump’s second term.

Until Mr Powell’s departure, Mr Trump has only one other seat to fill, the one vacated recently through the

surprise resignation of former Fed Governor Adriana Kugler

, the first Latina to serve on the Fed board.

Earlier in August, Mr Trump nominated Council of Economic Advisers chairman Stephen Miran to serve out the rest of Dr Kugler’s term. REUTERS