Trump Calls on Fed Gov. Cook to Resign. She Says She Won’t Be Bullied.

Above: Donald Trump, William Pulte, Lisa Cook (Getty Images (2); Bloomberg (1))

President Donald Trump called on Federal Reserve governor Lisa Cook to resign on Wednesday, the latest in a series of attacks by the administration against the central bank. Cook says she won’t step down.

“Cook must resign, now!!!” the president wrote on Truth Social. The Wall Street Journal reported later in the day that Trump told aides he is considering attempting to fire Cook over allegations of mortgage fraud. The White House didn’t respond to a request for comment on the Journal report.

Cook said late Wednesday that she will be defending herself against the claims made by Bill Pulte, the director of the Federal Housing Finance Agency, adding that she first learned of the federal investigation from media coverage of his social media posts. Pulte sent a criminal referral letter to Attorney General Pam Bondi last week and posted the letter on X earlier today.

“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said Wednesday. “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.”

The criminal referral accuses Cook of misrepresenting two homes as primary residences “in order to potentially secure lower interest rates and more favorable loan terms” in 2021.

Cook is currently serving a full 14-year term on the board that ends in January 2038. She was appointed in 2022 by then-President Joe Biden to fill an unexpired term. She was reappointed in 2023 to her current term.

Pulte told Barron’s on Wednesday that he believes Cook is “going to have to resign” from the Fed, adding that the allegation “raises questions about whether [Fed Chair Jerome] Powell knew about her mortgage fraud or not, and whether he’s complicit in this and the cover-up.”

The investigation into Cook’s mortgage was brought on by a tip that the FHFA received, Pulte said. He said the action against Cook was not designed to get Trump more seats on the board of governors.

“This is mortgage fraud,” Pulte said. “Like anything, nobody is above the law, and we prosecute mortgage fraud wherever we find it.”

Mortgage fraud is a broad term that can refer to a number of actions “characterized by a material misstatement, misrepresentation, or omission in relation to a mortgage loan, which is then relied upon by a lender,” according to the FHFA.

It’s true that identifying a home as a primary residence, as opposed to a secondary residence or investment property, tends to secure a lower interest rate from a lender, says Dave Fagundes, a law professor specializing in real estate at Emory University School of Law.

What is less clear from the allegations so far is whether Cook actually engaged in such a misrepresentation. It’s possible, for example, that the Michigan property was her primary residence at the time of the first loan application but that the Atlanta condo was, or at least was intended to be, her primary residence thereafter, Fagundes tells Barron’s.

“It’s important to know the full context of the question she answered on the mortgage application. There would be a big difference between ‘Is this property your current primary residence’ and (something like) ‘Do you intend to make this property your primary residence,’” he says.

Under federal law, Cook could be liable to fines of up to $1 million and prison time of up to 30 years if found guilty. But Fagundes says its very unlikely a judge would sentence her to anywhere near these maximums.

“Sentencing depends in part on the severity of the offense. In this case, a misrepresentation about primary versus secondary residence would be pretty marginal: The lender would have lost a few basis points’ worth of interest charges for a few years, and maybe been exposed to a bit more risk than they were fully aware,” he adds.

An upcoming report from real estate data analytics company Cotality, formerly CoreLogic, estimates that one in 106 home purchase mortgage applications as of the second quarter of 2025 contained indications of fraud.

Mortgage fraud is relatively rare, at an estimated fewer than 1% of applications, notes Matt Seguin, Cotality’s senior principal of mortgage fraud solutions.

Few cases reach the level of federal sentencing, data suggest. In 2024, the most recent year for which data is available, only 38 mortgage fraud offenders were sentenced, according to U.S. Sentencing Commission data. Offenders were sentenced for 18 months on average.

Most mortgage fraud is committed by would-be homeowners fabricating documents or details to get a more favorable mortgage, Seguin says. A more costly, but less common, type of fraud is organized by industry insiders. “My understanding is a very, very small percentage of the mortgage fraud actually goes to an arrest, a conviction, a trial,” he says.

This is the latest attack hurled by the FHFA against political opponents. U.S. Attorney General Pam Bondi has launched investigations into similar claims against Sen. Adam Schiff (D, Calif.) and New York Attorney General Letitia James.

Schiff and James have both denied any wrongdoing. Former U.S. Attorney for the Southern District of New York Preet Bharara, who is representing Schiff, on Friday called the allegations against the senator “transparently false, stale, and long debunked.”

Although the Fed is an independent agency, the Federal Reserve Act and case law allow a president to remove a sitting governor from the Board “for cause,” a standard that would necessitate proving malfeasance or gross misconduct. Policy disagreements wouldn’t constitute a just cause.

During Cook’s time on the Federal Open Market Committee her voting record has been in step with the majority on monetary policy decisions; she has never filed a dissent. Governors Christopher Waller and Michelle Bowman, however, both voted to lower interest rates by a quarter of a percentage point at the July meeting—in contrast to the wider committee, which kept the target range for the federal-funds rate steady at 4.25% to 4.50%.

In her most recent speech on the economic outlook in June, Cook said the economy still looked to be in a “solid position,” but she did note that the “heightened uncertainty poses risks to both price stability and unemployment.”

Trump and his allies have been waging a multipronged offensive against the Fed in a bid to remake the independent agency responsible for setting interest-rate policy. The president has been clear that he’d like to see lower borrowing costs, faster economic growth, and a compliant Fed chair.

The administration, for example, has repeatedly raised concerns over the legitimacy of the $2.5 billion renovation of the central bank’s Washington, D.C., headquarters, opening investigations into the scope and authority of the project. The Fed has repeatedly disputed any wrongdoing with regard to the renovation and has said the administration lacks legal authority over its facilities.

Trump made a rare visit in late July to inspect the historic Eccles Building, one of the two Fed buildings undergoing renovations, taking the opportunity to criticize the cost of the renovation.

When a reporter asked Trump what it would take to get him to stop pressuring Powell, the president replied, “Well I’d love him to lower interest rates. Other than that, what can I tell him?”

Trump has also ramped up personal attacks against Powell, nicknaming him “Too Late” and calling for him to lower interest rates immediately for a variety of reasons. Powell’s term as chair is set to expire next May, but his term as governor isn’t set to end until January 2028. Previous Fed chairs have traditionally left the board after their term ended, which would provide Trump with another seat if Powell were to adhere to that practice.

Trump gained a foothold earlier this month when Adriana Kugler resigned months before her term was set to expire in January 2026. Trump nominated economist Stephen Miran, current chair of the White House Council of Economic Advisers and a sharp critic of the Fed, to replace her.

While the appointment is expected to be temporary, Trump is expected to nominate a second candidate in the coming months for a full 14-year term who will likely serve as the successor to Powell.

Write to Megan Leonhardt at megan.leonhardt@barrons.com, Shaina Mishkin at shaina.mishkin@dowjones.com and Nate Wolf at nate.wolf@barrons.com.