Lawyers representing Federal Reserve Governor Lisa Cook have refuted allegations of mortgage fraud made by a Trump administration official in a letter addressed to Attorney General Pam Biondi on Monday.
President Donald Trump used these accusations as a basis to call for her dismissal, marking the first instance of a president attempting to remove a Fed governor in the central bank’s history dating back 112 years.
This response from Cook’s legal team comes after a criminal referral in August by Bill Pulte, director of the Federal Housing Finance Agency, who has also made similar accusations of mortgage fraud against prominent Democrats such as New York Attorney General Letitia James, Sen. Adam Schiff, and Rep. Eric Swalwell.
The attempt to remove Cook from her position coincides with Trump’s criticism of the Fed for not lowering its key interest rate quickly enough. If Cook is ousted, it would provide the president with the opportunity to appoint a fourth member to the seven-member Fed board, securing a majority.
Cook took legal action to retain her position, and the Supreme Court ruled in her favor last month, allowing her to remain in office while she challenges the administration in court. The Supreme Court is set to hear arguments in January.
In the recent letter, Cook’s attorney, Abbe Lowell, argued that the case against her hinges largely on a single reference in a 2021 mortgage document, which he deemed insignificant compared to other accurate disclosures about her property acquisitions.
The letter stated, “There is no fraud, no intent to deceive, nothing remotely criminal or a basis for alleging mortgage fraud.”
Cook, the first Black woman to serve on the Fed’s governing board, was appointed by President Joe Biden in 2022.
The Justice Department declined to comment on ongoing investigations, while the FHFA did not provide a response to media inquiries.
In his accusations, Pulte claimed that Cook declared two different homes in Ann Arbor, Michigan, and Atlanta as her “primary residence,” potentially leading to lower mortgage rates or down payment requirements.
However, Lowell argued that Cook has primarily resided in the Ann Arbor property since purchasing it in 2005, justifying her classification of it as her “primary residence” in a mortgage refinance application in June 2021.
Lowell further explained that Cook’s mention of the Atlanta condominium as her “primary residence” in a July 2021 document was an isolated incident and not indicative of fraudulent intent. Previous filings referred to the property as a “vacation home” or second home.
The letter also addressed allegations regarding Cook’s Cambridge property, emphasizing that there was no fraudulent activity involved in her mortgage transactions related to that home.
Furthermore, Pulte’s selective pursuit of mortgage fraud allegations against Democrats, while ignoring similar claims against Republicans, was highlighted in the letter.
Amidst these developments, Lowell also sought to dismiss a case involving Letitia James, another client, which was influenced by Pulte’s actions. Lowell criticized Pulte for using the FHFA as a tool against political adversaries.
The defense filing noted Pulte’s persistence in pushing the investigation forward despite internal Fannie Mae investigators finding insufficient evidence of fraud.
Associated Press Writer Eric Tucker contributed to this report.
