Former U.S. President Donald Trump has called for Federal Reserve governor Lisa Cook to resign, citing allegations made by one of his political allies regarding her mortgages in Michigan and Georgia. This action intensifies his efforts to exert influence over the U.S. central bank.
Cook responded by stating she has "no intention of being bullied to step down" from her position. She also indicated she would gather accurate information to address any legitimate questions about her financial history. Reports suggest Trump is considering attempting to fire Cook, the first Black woman to serve on the Fed board.
The allegations against Cook were raised by U.S. Federal Housing Finance Agency Director William Pulte, who claimed she designated a condo in Atlanta as her primary residence after taking out a loan on her Michigan home, which she also declared as her primary residence. Pulte is also probing property Cook has in Massachusetts. Loans for primary residences often have more favorable terms than those for second homes or investment properties. The loans in question predate Cook's appointment to the Fed.
Trump quickly amplified the allegation, and the Justice Department is taking the matter seriously. Democrats on the U.S. House of Representatives Committee on Financial Services have criticized Trump's actions, vowing to defend Cook and the Fed's independence. Senator Elizabeth Warren echoed these concerns, stating the president should not weaponize the federal government to illegally fire Fed Board members.
Cook's financial disclosure documents show three mortgages taken out in 2021. Trump has used mortgage fraud investigations against political opponents in the past. The Justice Department will review the mortgage fraud referrals, but proving criminal liability may be challenging.
Trump has repeatedly criticized Fed Chair Jerome Powell over interest rates and has called for his resignation. Cook is one of three Biden appointees to the Fed whose terms extend beyond Trump’s time in office. Trump can name a new Fed chief when Powell’s term ends, but claiming a majority on the board may take more time.
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