Powell abstains from sharing his stance on Lisa Cook's contentious legal battle with Trump
In the midst of the ongoing FOMC rate-setting meeting, Federal Reserve Governor Lisa Cook finds herself embroiled in a legal battle over unsubstantiated allegations of mortgage fraud.
The move to take the fight to the Supreme Court is the latest in a string of attempts by the Trump administration to dismiss Cook from her position at the central bank. The allegations were raised by Bill Pulte, a Trump appointee to the agency overseeing Fannie Mae and Freddie Mac.
The mortgage loans for the homes at the center of the allegations were issued in 2021, before Cook was nominated by former President Joe Biden to join the Fed board. The three homes are located in Michigan, Georgia, and Massachusetts. Bill Pulte made two separate referrals to the Justice Department over those mortgage applications.
Cook's lawyer, Abbe Lowell, wrote in a filing on Sept. 2 that Cook "did not ever commit mortgage fraud." In a court appearance on the same day, Lowell reiterated this statement, stating that the allegations against Cook are baseless.
A loan estimate for the Atlanta home purchased by Cook shows it was declared as a "vacation home" in 2021. This information has not been contested by the Trump administration.
The Justice Department opened a criminal investigation into Cook over allegations of mortgage application fraud on Sept. 4. The Fed has stated that it will "abide by any court decision" regarding the legal battle.
President Donald Trump ousted Cook on Aug. 25, which prompted her to sue him in federal court three days later. The legal battle comes ahead of the FOMC rate-setting meeting, but Federal Reserve Chairman Jerome Powell declined to comment on the ongoing dispute.
At the conclusion of the two-day FOMC meeting, Powell spoke, but no new rate cut decision was announced. The Fed has previously acknowledged the potential legal feud, but has maintained that it will not interfere with its operations.
On Tuesday, the Trump administration vowed to take its fight over Cook to the Supreme Court. The outcome of this legal battle remains to be seen, but it is certain to have significant implications for the Federal Reserve and the broader financial industry.
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