Above, Lisa Cook.
The Department of Justice (DOJ) has opened a criminal investigation into Federal Reserve Board Governor Lisa Cook for alleged mortgage fraud, according to the Wall Street Journal. President Donald Trump moved to fire Cook from her position on the Fed in August, but she has refused to accept the firing, filing a lawsuit claiming the attempted move is unlawful and saying she intends to serve her full term on the Fed until 2038.
The DOJ investigation has, per The Wall Street Journal, issued subpoenas in its investigation of Cook.
The crux of the investigation and alleged fraud is a letter from Federal Housing Finance Agency (FHFA) Director Bill Pulte, addressed to Attorney General Pam Bondi. Pulte claimed that Cook misrepresented her “primary residence,” simultaneously claiming two properties in Atlanta, Georgia and Ann Arbor, Michigan as said primary residence on mortgage documents for those respective homes in order to receive lower mortgage rates.
Pulte further claimed that Cook misrepresented a Cambridge, Massachusetts property as a “second home” when she was drawing rental income from it. The WSJ report noted that proof for intent of mortgage fraud typically requires more than misstatements on documents.
Trump and Pulte both cite that the President has the authority to remove a Fed board member for “just cause” under existing law. That this qualifies for that standard has been disputed by Cook and her lawyer Abbe David Lowell; Lowell described the attempted firing as an “illegal action” in a statement to the New York Times.
The DOJ has previously opened mortgage fraud investigations into other Trump political opponents, such as New York Attorney General Letitia James and California Senator Adam Schiff. The WSJ cited a 2023 report from the Federal Reserve Bank of Philadelphia that found about one-third of single-family investors count as “fraudulent borrowers.”
Trump’s attempts to remove Cook have raised concerns about continued independence of the Federal Reserve. Trump has repeatedly pushed the Fed, particularly Chairman Jerome Powell, to cut interest rates, including personal attacks on social media. Pulte has also repeatedly called for Powell to resign as Fed chair on social media.
Cook was nominated to the Fed Board of Governors by President Joe Biden in 2022. If she is removed from the position, a majority of the board would be Trump appointees, as the President himself noted to reporters back in August.
The Federal Reserve will next meet to discuss an interest rate adjustment from September 16-17, 2025. It remains to be seen what, if any, impacts that Cook’s attempted firing could present at the meeting.
