Cook's lawyer says she made an inadvertent error listing her apartment in Atlanta as a primary residence
Federal Reserve Board Governor Lisa Cook at a central-bank conference in March.
Federal Reserve governor Lisa Cook on Wednesday denied White House allegations that she had committed mortgage fraud and said there were no grounds for President Donald Trump to oust her from her position at the central bank.
"For the second time in a year, we have explained why there is no legal basis for President Trump to remove Governor Cook for cause. An inadvertent error is not fraud," said Cook's attorney, Abbe Lowell, in a statement.
Earlier this month, the White House launched a second campaign to remove Cook, sending a letter that it was considering removing her from her position, giving her 21 days to respond to allegations of mortgage fraud.
Late Wednesday, Cook released a five-page response from her attorney to White House Counsel David Warrington that denied the charges.
The White House's first attempt to oust Cook was blocked in June by the Supreme Court, which ruled 5-4 that Cook had not been given the formal ability to contest the charges. The justices allowed Cook to continue serving her term at the Fed, which lasts until 2038.
Under the law, a president can only remove a Fed governor "for cause." In June, the Supreme Court did not rule on whether mortgage fraud met the "for cause" standard or specify the next steps in the case.
As a result, the White House swiftly moved to try again to oust her. The Fed board has seven members each with lengthy 14-year terms, limiting the president's ability to put his stamp on the central bank.
Last August, William Pulte, the director of the Federal Housing Finance Agency, referred Cook to the Justice Department for prosecution after uncovering documents that he said appeared to show Cook claimed two properties as primary residences, one in Michigan and one in Georgia at the same time in 2021, before she joined the Fed.
In his response, Lowell said signing a primary-mortgage agreement on the Georgia property was an entirely inadvertent oversight. The letter said the lender, which had worked with Cook in the past, knew that she worked full time as a tenured professor at Michigan State University. Other documents show Cook described her Georgia property as a "second home."
The White House said that Cook might have received favorable loan terms under fraudulent circumstances. But a mortgage expert hired by Cook said there is no evidence that she had received such favorable treatment.
The White House also alleged that Cook rented out her property in Georgia but didn't disclose rental income on her tax returns.
In his response, Lowell said that Cook had considered renting the property but never did.
"Governor Cook's apparent mistake on a form provided to her by her lender, which was aware of her other residences, was unintentional, not criminal, and occurred in her private capacity before she took office," Lowell wrote.
"Attempting to remove Governor Cook on the basis of these allegations of pre-office conduct would be 'corrosive of the independence that Congress sought to preserve' and would fall woefully short of the standard the Supreme Court has set. And doing so would raise troubling questions about why President Trump is singling out Governor Cook," Lowell wrote.
Lowell also jabbed at the White House in his letter, pointing out several press reports that the president and five current or former members of his cabinet, including Treasury Secretary Scott Bessent and Attorney General Todd Blanche, have entered into primary-residence mortgages for separate homes.
The White House has not said what will happen next once Cook responded. If it follows through and removes Cook, she will likely file suit in lower courts to block the move, legal experts said. Eventually it could end up back before the Supreme Court. So it could be months, or far longer, before the outcome is known.
-Greg Robb
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