President Donald Trump urged Federal Reserve governor Lisa Cook to resign after Bill Pulte, director of the agency overseeing Fannie Mae and Freddie Mac, asked the Justice Department to investigate alleged mortgage fraud. Pulte alleged Cook claimed two homes as principal residences, one in Michigan and one in Georgia, and listed an Atlanta condo for rent to obtain more favorable mortgage terms. Cook was appointed to the Fed's governing board in 2022 and reappointed to a term through 2038. If Cook leaves, the White House could nominate a replacement aligned with lower-rate preferences. Fed governance includes seven board members and regional presidents who influence rate decisions, and replacing the chair alone may not ensure policy changes.
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.
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.
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