Fed’s Cook blasts mortgage fraud allegations against her as ‘baseless’ in letter to AG Bondi

Federal Reserve Governor Lisa Cook has strongly disputed allegations of mortgage fraud that led President Donald Trump to attempt her removal from the central bank’s board, marking an unprecedented challenge to the Fed’s independence.

In a letter delivered Monday to Attorney General Pam Biondi, Cook’s attorney Abbe Lowell characterized the accusations as baseless and politically motivated. The letter represents Cook’s first formal response to criminal referrals made in August by Bill Pulte, director of the Federal Housing Finance Agency (FHFA).

“There is no fraud, no intent to deceive, nothing whatsoever criminal or remotely a basis to allege mortgage fraud,” Lowell wrote in the letter.

The controversy centers on Pulte’s claim that Cook improperly designated two properties—one in Ann Arbor, Michigan, and another in Atlanta—as primary residences, potentially allowing her to secure more favorable mortgage terms. Pulte later added allegations concerning a third property in Cambridge, Massachusetts.

Cook, appointed by President Biden in 2022 as the first Black woman to serve on the Fed’s governing board, has sued to retain her position. The Supreme Court ruled last month that she could remain in her role while legal proceedings continue, with arguments scheduled for January.

The attempted removal marks the first time in the Federal Reserve’s 112-year history that a president has sought to oust a sitting governor. The move comes amid Trump’s frequent criticism of the central bank for not cutting interest rates more aggressively.

Financial markets have closely monitored the situation, as Cook’s potential removal would give Trump the opportunity to appoint a fourth member to the Fed’s seven-member board, securing a majority that could significantly influence monetary policy.

Lowell’s letter directly challenges Pulte’s allegations, explaining that Cook has primarily lived in her Ann Arbor property since purchasing it in 2005, making it accurate to list it as her primary residence in a June 2021 refinancing application. Regarding the Atlanta condominium purchased a month later, Lowell described the “primary residence” designation as an “isolated notation” that contradicted earlier documentation describing it as a vacation home.

“It would be impossible to conclude that she intended to defraud the lender by inadvertently listing the property as her ‘Primary Residence,'” the letter stated.

For the Cambridge property, which Cook purchased while working at Harvard University, Lowell provided documentation showing she had appropriately redesignated it as a second home when refinancing in 2021 after moving to Michigan State University.

The attorney’s letter also suggests political motivation behind Pulte’s actions, noting he has made similar allegations against prominent Democrats including New York Attorney General Letitia James, Senator Adam Schiff, and Representative Eric Swalwell, while showing “little appetite” to investigate similar allegations involving Trump allies or even Pulte’s own father.

Pulte, who took his position at FHFA under the Trump administration, has recently faced criticism for other controversial actions. He sparked debate by advocating for 50-year mortgages—a proposal widely criticized by housing economists as potentially increasing overall loan costs for consumers. He also self-appointed himself as chairman of Fannie Mae and Freddie Mac, the government-sponsored lending giants that underpin America’s mortgage market.

Further controversies have emerged from Pulte’s leadership at FHFA, including reports that executives at Fannie Mae were forced out after raising concerns about a Pulte confidant sharing confidential pricing data with Freddie Mac, potentially exposing the companies to collusion allegations.

The Justice Department and FHFA have not yet responded to requests for comment on Cook’s letter.

The case highlights growing tensions over the Federal Reserve’s independence, a principle long considered essential to effective monetary policy that remains insulated from short-term political pressures.