Trump renews bid to remove Fed governor Lisa Cook over mortgage fraud claims

The Trump administration has revived its effort to remove Federal Reserve governor Lisa Cook over disputed mortgage fraud allegations. The move intensifies a legal battle over presidential authority and the Federal Reserve's independence.

In Short

• Supreme Court earlier allowed Cook to stay while her lawsuit proceeds
• White House has now given Cook until August 26 to respond
• Fresh notice follows Roberts saying Trump could retry with proper process

The Trump administration is moving ahead with its effort to remove Federal Reserve governor Lisa Cook, two months after the US Supreme Court allowed her to stay in her job while she contests President Donald Trump’s earlier attempt to fire her over mortgage fraud allegations she has denied.

In a 5-4 decision in June, the justices said Cook, who was nominated to the Federal Reserve’s Board of Governors by President Joe Biden, could remain in her post for at least as long as her lawsuit over the dismissal continues. The Trump administration is appealing a lower court ruling that went in Cook’s favour.

Chief Justice John Roberts said in a footnote to the Supreme Court opinion that nothing barred Trump from “trying again” to remove Cook, as long as she was given proper notice and a chance to respond. After the ruling, Trump said he would do so, vowing to “take appropriate action immediately”.

In a letter sent this week and obtained by The Associated Press, White House aide Dan Scavino told Cook that Trump was “considering removing you from your position” and gave her until August 26 to challenge the move, citing the Supreme Court’s requirement on notice.

The move stems from a criminal referral made last August by Bill Pulte, director of the Federal Housing Finance Agency, who accused Cook of mortgage fraud by listing two homes, one in Ann Arbor, Michigan, and another in Atlanta, as her “primary residence”. Buyers can get lower mortgage rates or make smaller down payments on primary homes than on second or holiday homes.

Cook has strongly rejected the allegations, saying Trump had tried to force her out “on a manufactured pretext because I refused to bow to political pressure and continued to set interest rates based only on what would best serve the American people”.

Her lawyer, Abbe Lowell, said in a November letter that Cook has mostly lived at the Ann Arbor property since buying it in 2005. He said it was therefore accurate for her to describe it as her “primary residence” in a June 2021 application to refinance its mortgage. A month later, she bought a condominium in Atlanta and, in a July 2021 document, also described it as her “primary residence”.

Lowell said that was an “isolated notation” and did not show any intent to defraud. He added that an earlier mortgage application to the same lender in May 2021 had described the Atlanta condominium as a “vacation home”. Cook also listed it as a second home in federal filings during her confirmation process to become a Federal Reserve governor.

The latest White House letter largely repeats the allegations first made a year ago. “These allegations are as baseless now as they were a year ago when President Trump tried to remove Governor Cook and interfere with the independence of the Federal Reserve,” Lowell said in a statement. “No matter what President Trump tries to do next, this much is clear under the facts and Supreme Court precedent - there is no valid cause for removing Governor Cook. As we did before, we will challenge this latest pretext and preserve her position and the historic role of the Fed,” he added.

The case now returns to the dispute over whether Cook can be removed, with the administration attempting again after the Supreme Court said she must first be given notice and a chance to contest the action.

With PTI Inputs

- Ends