The Department of Justice has reportedly opened an investigation into Federal Reserve Governor Lisa Cook over alleged mortgage fraud, just one day after President Trump urged the Biden appointee to resign.
It is the latest move by the Trump administration to step up pressure on the Federal Reserve, which has faced criticism from officials for being slow to cut rates and splashing out $2.5 billion on revamping its HQ.
Bloomberg reported earlier on Thursday that Ed Martin, a senior DOJ official who led probes into Sen. Adam Schiff (D-Calif.) and New York Attorney General Letitia James, has written to Federal Reserve Chairman Jerome Powell stating that Cook’s situation “warrants further scrutiny.”
“I strongly recommend that you suspend Ms. Cook from the Federal Reserve Board immediately,” Martin’s letter was quoted as saying. “No one believes it’s appropriate for her to remain in her role while serious questions linger.”
The Post has approached the DOJ for comment. A Fed spokesperson declined to comment.
Cook has vowed to stay in her position since the claims were first made by Federal Housing Finance Agency boss Bill Pulte that she had falsified documents to secure cushy loan terms.
“I will not be intimidated into leaving my role based on baseless claims raised on social media,” Cook said through a Federal Reserve spokesperson on Wednesday. “I take any legitimate inquiries about my financial background seriously and am compiling accurate information to address them.”
Pulte, a former private equity supremo and Trump loyalist, wrote a letter to Attorney General Pam Bondi and Justice Department official Ed Martin on August 15 suggesting that Cook may have committed a criminal offense.
The former journalist alleged that Cook “falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute.”
He said Cook had designated a condo in Atlanta as her primary residence after taking a loan on her home in Michigan, which she also declared as a primary residence.
The Wall Street Journal reported on Wednesday that the president was also considering trying to fire the economist over the allegations.
Cook’s federally filed financial disclosure documents show three mortgages taken out in 2021, including a 15-year 2.5% loan on an investment property and two loans for personal residences, including a 30-year 3.25% mortgage and a 15-year 2.875% mortgage.
The weekly average rate for 30-year loans during 2021 ranged between 2.9% and 3.3%, Mortgage Bankers Association data shows.
Democrats on the U.S. House of Representatives Committee on Financial Services blasted Trump’s attack on 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.”
Cook’s resignation would allow Trump to appoint another member to the Federal Reserve Board, intensifying his efforts to influence the central bank to cut interest rates.
Trump has repeatedly criticized Powell, calling him “tardy” for not reducing rates sooner and suggesting he resign.
America’s central bankers will meet again to decide on setting the key borrowing rate nationwide in Jackson Hole, Wyoming, on September 16 and 17.
The commander-in-chief has also attacked the Federal Reserve over the $2.5 billion cost of its “Palace of Versailles” headquarters renovation, a story this newspaper first broke in April.
Republicans have said they could open a congressional investigation into the project after Chair Powell appeared to directly contradict the official planning documents during a June testimony before the Senate Banking Committee.
Should Powell eventually be toppled over the scandal, there are several leading candidates in the frame to take over from him.
They include former Fed governor Kevin Warsh, current Fed Governor Christopher Waller, and Kevin Hassett, currently Trump’s National Economic Council director.
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