Lisa Cook did not refute any of the allegations of mortgage fraud in a lawsuit challenging her firing from the Federal Reserve board by President Donald Trump, Federal Housing Finance Agency Director Bill Pulte said Thursday.
Trump announced Monday he was firing Cook, who was appointed by former President Joe Biden in 2022 to fill an empty seat and reappointed in 2023 to serve a 14-year term, after allegations of mortgage fraud were raised by Pulte. Trump invoked his authority under Article II of the Constitution and the Federal Reserve Act of 1913, asserting the allegations constituted sufficient “cause” under the act for her removal.
Cook has been accused of misrepresenting two properties in Michigan and Georgia as her primary residences in 2021 to secure favorable mortgage terms. A lawsuit she filed Thursday challenging her firing maintained the fraud allegations do not meet the standard of “sufficient cause” under the Federal Reserve Act and instead are being used by Trump to stack the Fed board in his favor to get interest rate cuts, CNBC reported.
The lawsuit called the fraud allegation “unsubstantiated and unproven” and suggested the issue regarding documents Cook submitted for home loans might have been caused by a “clerical error” on her part, CNBC reported. The complaint said that even if Cook made a mistake on the applications, it still wouldn’t rise to cause for her firing.
In a statement to CNBC, Pulte noted that Cook did not attempt to refute the claims against her.
“In her filing, Ms. Cook does not deny that these are her mortgage documents, so one has to wonder why she, or [Fed Chair] Jerome Powell, would want this to be a part of the Federal Reserve, which is supposed to have preeminent integrity and which is critical to the safety and soundness of the U.S. mortgage market,” Pulte said.
U.S. District Judge Jia Cobb, who was appointed by Biden in 2021, set a hearing for Friday morning on Cook’s request to block her firing.
If Trump is successful in removing Cook, it would give him a 4-3 edge on the board in terms of appointees should Stephen Miran be confirmed by the Senate to fill an empty seat, CNBC reported. That could be extended to 5-2 if Powell chooses not to fill out his term as a board member after his term as head of the central bank expires in May.
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