Fed Governor Lisa Cook did not commit mortgage fraud: lawyer

Lisa Cook, governor of the Federal Reserve, speaks during a Fed Listens event in Washington, D.C., on March 22, 2024.

Al Drago | Bloomberg | Getty Images

Federal Reserve Board Governor Lisa Cook “did not ever commit mortgage fraud,” her lawyer Abbe Lowell said Tuesday in a new court filing bolstering arguments why a judge should temporarily block President Donald Trump from firing her.

Lowell argued in the same filing that any of Cook’s statements that she made on mortgage applications — which Trump has cited as the reason for her termination — do not give the president legal cause to remove her.

Lowell said multiple federal government entities received her mortgage details before the Senate first confirmed her nomination to the Fed in May 2022. The same information was disclosed to the White House prior to her appointment by former President Joe Biden, Lowell wrote.

“The Government has long known about the alleged facial inconsistencies in Governor Cook’s financial documents,” he wrote.

Because of that fact, the mortgage applications “likely cannot constitute a legitimate basis” for Trump to fire her, the attorney argued.

He called Trump’s purported reason for removing Cook a “mere pretext,” saying that the president’s true goal is getting the Fed to lower interest rates.

“The public record is replete with [Trump’s] comments demanding that the Board, including Governor Cook and its other members, lower interest rates or face consequences in 2025.”

Lowell’s filing came hours after nearly 600 economists signed an open letter warning that her potential firing threatens the Fed’s independence and erodes trust in a key pillar of the U.S. financial system.

Trump moved to terminate Cook last week.

He said in a letter that she was being removed after Federal Housing Finance Agency Director Bill Pulte accused her of having committed “mortgage fraud.”

Cook quickly sued to block her firing.

Pulte initially accused Cook of claiming two properties, one in Michigan and one in Georgia, as her primary residence. He later made similar claims about Cook’s mortgage for a condominium in Cambridge, Massachusetts.

But Lowell said in Tuesday’s filing that Cook listed the Michigan address as her “primary residence” and the Georgia address as her “2nd home” in a questionnaire previously submitted to the government.

He also said that a separate questionnaire that she submitted shows the Georgia address listed as her “present” residence and the Michigan one as her “present” residence and “current permanent residence.”

That questionnaire also called the Cambridge home Cook’s “present residence,” as well as “a second home and rental property,” the filing said.

The public financial disclosure report that Cook filed as a Fed nominee listed mortgage designations “for each of the relevant properties,” Lowell said.

“If those are facial contradictions, as the Government and President claim, they certainly existed in the materials that Governor Cook provided as part of her Presidential vetting and Senate Confirmation process,” Lowell wrote.

He said senators or White House officials “could have inquired of her about any alleged ‘facial inconsistencies'” at the time, but did not.

Nobel economists defend Cook against Trump

The 593 signatories include Nobel laureates Joseph Stiglitz, Claudia Goldin, Alvin Roth, Paul Milgrom and Paul Romer; multiple former Federal Reserve economists; and Christina Romer and Jared Bernstein, who led the U.S. Council of Economic Advisers under Presidents Barack Obama and Biden, respectively.

The economists noted that the Federal Reserve Act, which Congress passed in 1913, designed the Fed to be independent and “insulated from day-to-day politics.”

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The letter also notes that the attacks on Cook from Trump and his officials rest on “unproven accusations.”

“This approach threatens the fundamental principle of central bank independence and undermines trust in one of America’s most important institutions,” the letter says. “That trust is a cornerstone of the system that has fueled America’s economic vitality over the decades.”

The economists also warned that weakening the high standard for removing a governor “increases monetary policy uncertainty and forces markets to price political risk into interest rates, raising those rates and costs for families and businesses.”

White House spokesman Kush Desai, in a statement on Tuesday’s letter, said, “The President acted within his lawful authority by removing Cook for cause, and this action augments the Federal Reserve’s credibility and accountability for both the markets and the American people.”

The Fed appears poised to vote to lower its target interest rate by a quarter of a percent in September. But Trump and his allies want steeper cuts.

Correction: Paul Milgrom is a Nobel laureate. An earlier version misspelled his name.

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