President Trump escalated his pressure campaign against the Federal Reserve this week by calling on Lisa Cook, a governor of the central bank, to resign or be fired, pointing to unconfirmed allegations that she committed mortgage fraud.
The issue is hanging over the central bank on Friday, the day the Fed chair, Jerome H. Powell, delivered a pivotal speech on the nation’s economic outlook. In it, Mr. Powell sent his strongest signal yet that the central bank was preparing to restart interest rate cuts soon.
In hopes of forcing down interest rates, Mr. Trump has relentlessly attacked the politically independent Fed and its members. Until recently most of his attention was focused on Mr. Powell.
But on Wednesday, Mr. Trump urged Ms. Cook to resign after Bill Pulte, the director of the Federal Housing Finance Agency, accused her of falsifying records to obtain more favorable terms on mortgages. Mr. Pulte said the agency had referred the issue to the Justice Department.
On Thursday, Ed Martin, an official at the Justice Department, called for a closer examination in a letter sent to Mr. Powell. He also encouraged Mr. Powell to fire Ms. Cook, although the Fed chair has no legal authority to remove her.
Ms. Cook, the first Black woman to serve as a Fed governor, was an economics professor at Michigan State University when former President Joseph R. Biden Jr. nominated her for the Fed board in 2022.
Here’s what to know about the accusations against her.
What are the allegations against Lisa Cook?
On Wednesday, Mr. Pulte said on social media that his agency had made a criminal referral to the Justice Department alleging that Ms. Cook committed mortgage fraud. According to Mr. Pulte, in 2021 she designated both a condominium in Atlanta and a home in Ann Arbor, Mich., as her primary residence when taking out loans.
In a 44-page letter that his agency sent to the Justice Department, Mr. Pulte claimed that Ms. Cook had potentially “falsified bank documents and property records” in an effort to gain more favorable loan terms and lower interest rates. Mortgage loans for primary residences tend to come with advantages because lenders consider them to be a lower risk than loans for vacation homes or investment properties.
According to the letter, Ms. Cook obtained a loan on the Michigan home on June 18, 2021, and certified that she would use it as her “principal residence” within 60 days and for a full year. Two weeks later, Ms. Cook purchased the Atlanta condo and affirmed that the property would be her principal residence, according to the letter.
Mr. Pulte also implied that Ms. Cook had not properly disclosed rental income she might have gained from the Atlanta condo, citing “online records” that the residence was listed for rent in September 2022, but no further evidence. Mr. Pulte said a review of financial disclosures had found that Ms. Cook did not disclose rental income tied to the address in 2022 or 2023.
On Friday, Mr. Pulte posted a photo of a financial disclosure document from 2023, which appears to list Ms. Cook’s loan on the Atlanta condo as a mortgage on a “personal residence.” Mr. Pulte also posted a screenshot of a Zillow webpage that says the property was listed for rent in September 2022 and that the listing was removed about two weeks later.
In her most recent financial disclosure, Ms. Cook listed three mortgages she obtained in 2021, with interest rates ranging from 2.5 percent to 3.25 percent. She reported rental income from her residence in Michigan in filings from 2024 and 2025.
What has Ms. Cook said in response?
On Wednesday evening, Ms. Cook said she had learned from media reports that Mr. Pulte made a criminal referral based on the mortgage applications that predated the time she joined the Fed board.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” she said in a statement. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve, and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”
Is there evidence of fraud?
There has been limited information released publicly about Ms. Cook’s mortgages, and she has not yet provided more context about the loans.
“Right now, there’s very little factual information in the public record about what actually transpired,” said Kathryn Judge, a professor at Columbia Law School who focuses on financial regulation. “We don’t yet know enough about what the lender’s understanding was, or the environment in which Cook made representations as a borrower. So it’s very hard in the abstract to try to draw any meaningful inference about whether there was actual wrongdoing.”
Kathleen Engel, a mortgage finance and regulation expert at Suffolk University Law School, said a borrower who intentionally deceived lenders by falsely affirming a primary residence in order to receive a benefit like a lower interest rate could be charged with fraud. But she said Mr. Pulte’s agency had not produced much evidence to support that claim.
“Fraud has a lot of elements to it, including an intent requirement, and there’s nothing in what they have provided here that would form the basis of a fraud charge,” Ms. Engel said.
She also noted that Ms. Cook might not have collected income from the Atlanta rental during 2022 or 2023. “Just because you list a property for rent doesn’t mean that you were able to rent it and had income,” she said.
Could Ms. Cook be removed?
The president cannot oust a Fed board member without “cause,” which is typically interpreted to mean malfeasance or gross misconduct, but that has not been fully tested in court.
Lev Menand, a professor at Columbia Law School and former economist at the Federal Reserve Bank of New York, said he thought the allegations so far against Ms. Cook were “not sufficient” enough to allow Mr. Trump to remove her from the Fed, adding that she has not been charged or convicted of any crime.
“If there were a conviction for mortgage fraud, then we have this question of whether or not the statute would allow that as cause” for her firing, Mr. Menand said, noting that the law generally permits dismissal for wrongdoings related to professional misconduct.
“This would be a complicated proceeding,” he said.
It is also unclear whether actions taken before a Fed official took public office would be justifiable grounds for removal, according to Peter Conti-Brown, a professor at the Wharton School at the University of Pennsylvania.
He said there appeared to be “more smoke here in terms of wrongdoing” compared with the president’s recent focus on the central bank’s building renovations. But he said it was also “an escalation of the manufactured crisis around Fed legitimacy” that Mr. Trump has fostered.
What does this mean for the Fed?
Economists and others have voiced concerns over Mr. Trump’s attempts to undermine the central bank and exert influence over monetary policy. They say the institution’s independence is critical to fulfilling its mandate to keep inflation low and stable while maximizing employment.
Experts have warned that interfering with the Fed’s independence could have punishing economic and financial ramifications. If interest-rate decisions are based on political pressure instead of economic data, households and businesses could suffer, they say.
“The lack of partisan influence over the central bank has been really important in guarding against the risk that the short-term interests of politicians could override the Fed’s statutory mandates,” said Graham Steele, a longtime financial regulation lawyer and a Treasury Department official during the Biden administration.
Has the administration opened similar investigations before?
Yes. Mr. Pulte has also accused Senator Adam Schiff, a California Democrat who led congressional inquiries into Mr. Trump during the president’s first term, of engaging in mortgage fraud.
He also leveled similar accusations against Letitia James, the New York attorney general, who won a civil fraud trial against Mr. Trump before he took office for his second term.
The Federal Housing Finance Agency investigates claims of mortgage fraud as part of its regulatory function. Typically, investigations are carried out by agents assigned to the agency’s Office of Inspector General. It is unclear whether agents have been involved in the investigation into Ms. Cook.
A referral to federal prosecutors would not necessarily be unusual, but it is unusual for referrals for criminal prosecution to be publicized. Agencies are generally reluctant to comment on ongoing investigations for fear of undermining the investigations or harming the reputations of people not yet charged with a crime.
Usually, these sorts of cases are discovered and prosecuted when a loan goes bad. Several experts said it was rare for these kinds of mortgage cases to be brought or investigated before a loan was deemed delinquent or in default.
A 2023 study from the Federal Reserve Bank of Philadelphia found that “owner-occupancy fraud,” the kind of fraud Ms. Cook is being accused of, was somewhat rare. Researchers estimate that, on average, between 2 percent and 3 percent of borrowers misrepresent their occupancy status when applying for a mortgage.