Lisa Cook, a governor at the Federal Reserve, no doubt gets this question more than anyone else. Now allegations of mortgage fraud have surfaced, increasing the pressure for her to resign. The controversy is centered on two mortgages she obtained in rapid succession. This begs the question of whether she’s complying with federal fair housing law. That growing predicament has recently attracted the national spotlight attention of political heavyweights, like centrist Democrat, U.S.
Over the next 20 months, from June 2021 through February 2022, Cook received rental assistance matching these payments on average to 60% of the mortgage payment. This mortgage also came with a requirement that the property be her main residence for at least one year. Just two weeks later, she secured another mortgage on a property in Georgia. She subsequently identified her new home as her principal residence. To make matters worse, the Georgia property was quickly re-listed as a rental property.
Bill Pulte, director of the Federal Housing Finance Agency, is calling for a probe. He’s called on the Justice Department to investigate Cook’s conduct related to the two mortgages. In a letter dated August 15, Pulte expressed concerns that Cook may have “falsified bank documents and property records to acquire more favorable loan terms,” potentially committing mortgage fraud under criminal statutes.
As the rumors and charges against her spread, Cook is left in an untenable position. Indeed, President Trump has repeatedly called for her to resign from her leadership position. Like Cook, he declared on his social media site, “Lisa Cook should be fired, immediately!!! This most recent demand points to the larger, long‐standing conflict between the Trump administration and the Federal Reserve. Most of all, it’s aimed straight at the central bankers Trump is trying to undermine.
If Cook resigns from her Fed’s board, there will be just two governors left. These two would be the only ones appointed entirely by a Democratic president among the seven total appointed seats. A Cook resignation would not, by itself, end the ongoing legal investigation into her mortgages, according to legal experts consulted by IBJ.
Jaret Seiberg, a financial analyst with Cowen Group, speculated on the consequences of Cook’s likely departure. “We see a window for the Senate to confirm Stephen Miran as a Fed governor, but question if Lisa Cook has an incentive to resign before the meeting,” he stated. “Either way, we see limited impact as the Fed’s rate-setting committee’s membership is broader than just Federal Reserve Board members.”
Seiberg made the argument that if Cook were to resign, it wouldn’t end the ongoing legal investigation into Cook. That would seem to make it very improbable that she resigns before the next Federal Reserve meeting.
The ongoing investigation into Cook’s financial dealings represents an expansion of the Trump administration’s pressure campaign against the Federal Reserve. This last campaign is aimed precisely at those central bankers perceived as antagonistic to the ex-president’s agenda. Meanwhile, Federal Reserve policymakers are getting ready for their annual retreat in Jackson Hole, Wyoming. In the meantime, Cook’s case remains one of the most closely monitored in America.