Federal Reserve Governor Lisa Cook has offered a detailed defense against mortgage fraud allegations that prompted President Donald Trump’s attempt to remove her from office. In a letter to US Attorney General Pam Bondi, Cook’s lawyer, Abbe Lowell, argued that the alleged discrepancies in her mortgage applications were either accurate at the time or simple “inadvertent notations,” insufficient to constitute fraud given that other disclosures had been made to lenders.
Cook has consistently denied any wrongdoing, and the Supreme Court has temporarily blocked Trump’s firing, scheduling arguments for January 2026.
Background of the Allegations
The controversy stems from mortgage applications for three properties located in Michigan, Georgia, and Massachusetts. Federal Housing Finance Agency (FHFA) Director William Pulte referred the applications to the Department of Justice (DOJ) in August, alleging inconsistencies that he characterized as potential fraud.
Cook’s defense, delivered through her legal team, contends that Pulte’s two criminal referrals fail to show any evidence that she intentionally misled lenders. The letter states that the accusations “fail on even the most cursory look at the facts,” highlighting that any discrepancies were minor and documented in good faith.
Claims of Selective and Vindictive Prosecution
Cook’s attorney, Lowell, further accused Pulte of selectively targeting political opponents of Trump while overlooking similar issues involving Republican officials. According to The Wall Street Journal, Lowell pointed to broader conduct by Pulte, including the recent dismissal of the FHFA acting Inspector General and other internal watchdogs at Fannie Mae, which undermined the credibility of the referrals against Cook.
The letter also referenced recent reporting showing that the White House removed FHFA acting Inspector General Joe Allen after he attempted to provide discovery material related to an indictment against New York Attorney General Letitia James, who faces similar bank fraud and false statement allegations stemming from Pulte’s referrals.
Legal and Procedural Context
The case is under investigation, with no criminal charges filed against Cook. The DOJ has assigned Ed Martin, the department’s pardon attorney, as a special assistant US attorney to assist with investigations into mortgage fraud involving public figures. Separate investigations are reportedly ongoing for other Democrats, including California Senator Adam Schiff, also at Pulte’s request.
In court filings, Cook has challenged her removal, arguing that the Trump administration’s efforts were politically motivated and lacked legal justification. The Supreme Court’s temporary block ensures that she remains in her Federal Reserve post until arguments are heard early next year.
Implications for Federal Reserve Independence
The case has raised questions about political influence over independent federal institutions, particularly the Federal Reserve, which operates with statutory independence to manage the nation’s monetary policy. Experts warn that attempts to remove Fed governors for politically motivated reasons could undermine confidence in the central bank and broader financial markets.
Leave a Reply