The Justice Department has launched a criminal investigation into Federal Reserve Governor Lisa Cook following allegations that she misrepresented property details on multiple mortgage applications.
The investigation stems from a criminal referral by Bill Pulte, head of the Federal Housing Finance Agency and a Trump appointee. According to the referral, Cook allegedly misclassified homes in Michigan, Georgia, and Massachusetts to obtain better mortgage terms.
As The Wall Street Journal reports:
Cook’s lawyer, Abbe Lowell, didn’t immediately respond to a request for comment. The Justice Department declined to comment.
Cook filed a lawsuit last month alleging Trump’s move to fire her was unlawful. She argued Trump “concocted” a basis for her firing to vacate a seat on the board that he can fill to “forward his agenda to undermine the independence of the Federal Reserve.”
The Federal Reserve Act allows the president to fire Fed governors “for cause.” The Trump administration says it was within the president’s authority to dismiss her. Cook’s lawyers, in a court filing Tuesday, said she “did not ever commit mortgage fraud.”
Pulte accused Cook of misleading banks on multiple mortgage applications to receive favorable lending terms, such as lower interest rates, typically given to a buyer who intends to occupy the home they purchase.
In a recent letter to Fed Chair Jerome Powell, DOJ mortgage fraud expert Ed Martin called for Cook’s immediate removal, stating the allegations “require further examination.” Martin warned that “no American thinks it is appropriate that she serve during this time with a cloud hanging over her.”
So far, Cook has refused to resign, calling the demands politically motivated. She insists she will provide full documentation to address any legitimate concerns.
After President Trump moved to remove Cook “for cause,” she hit back with a lawsuit — Cook v. Trump — arguing that her termination had no legal basis.
Critics say the case could test the limits of the Fed’s institutional independence. Over 590 economists, including several Nobel laureates, have signed an open letter defending the central bank’s autonomy and warning of political overreach.
Federal Judge Jia Cobb is weighing Cook’s request for an emergency order to block her removal from the Federal Reserve Board while her lawsuit proceeds — effectively pausing the Trump administration’s attempt to fire her pending a full hearing.
The next Federal Open Market Committee (FOMC) meeting is set for September 16–17, with a policy statement and any rate decision due at 2:00 p.m. ET on the second day, followed by a press conference.
This is a breaking news story. Please check back for updates.
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