The simmering battle over the independence of the Federal Reserve has reached a fever pitch as President Donald Trump’s administration pushes to oust Governor Lisa Cook from the central bank’s board just days before a key decision on interest rates. At the heart of the dispute are explosive allegations of mortgage fraud—claims Cook and her legal team have forcefully denied, now armed with new evidence that appears to undercut the White House’s case.
On September 13, 2025, attorneys for Cook filed an urgent motion with a U.S. appeals court, asking it to reject the Trump administration’s emergency request to remove her from the Fed board. The legal maneuver comes as the Federal Reserve’s interest rate-setting committee prepares to meet on September 16-17, a gathering widely expected to result in a quarter-point rate cut—a move that could ripple through the U.S. economy by lowering borrowing costs for millions of Americans.
“A stay by this court would therefore be the first signal from the courts that our system of government is no longer able to guarantee the independence of the Federal Reserve,” Cook’s lawyers warned in their filing, according to The New York Times. “Nothing would then stop the president from firing other members of the board on similarly flimsy pretexts. The era of Fed independence would be over. The risks to the nation’s economy could be dire.”
The stakes could hardly be higher. If the Trump administration’s appeal succeeds, Cook would be removed from her post until the case is resolved, forcing her to miss the pivotal Fed meeting. If the court sides with Cook, the administration could escalate the fight to the Supreme Court. The appeals court set a deadline of 3 p.m. Eastern on September 14 for the administration’s response, underscoring the urgency and national attention surrounding the case.
At the center of the controversy are accusations by President Trump and Bill Pulte, director of the Federal Housing Finance Agency, that Cook committed mortgage fraud by claiming two different homes as her primary residence in 2021. The allegations, if proven, could have allowed Cook to secure more favorable loan terms, including a lower interest rate and smaller down payment. Trump and his allies argue that this conduct—regardless of when it occurred—calls into question Cook’s trustworthiness as a steward of the nation’s economy.
But a series of newly surfaced documents, first reported by Reuters and reviewed by The New York Times, cast serious doubt on the fraud narrative. A loan estimate dated May 28, 2021, provided by Cook’s credit union, shows that she explicitly declared the Atlanta condominium in question as a “vacation home,” not a primary residence. In a December 2021 security clearance form, submitted as part of her vetting for the Fed board, Cook again described the Atlanta property as a “second home.”
These disclosures, according to mortgage fraud expert Kathleen C. Engel of Suffolk University, “dramatically weaken the fraud allegation.” Engel told The New York Times, “She was candid about how she was using the property. It actually rebuts any inference that she engaged in fraud.” Two independent real estate experts interviewed by Reuters agreed that the loan estimate supports Cook’s position.
Further bolstering Cook’s defense, Fulton County property records confirm that she never sought a tax exemption for the Georgia condo as a primary residence—a step that would have been required to benefit from lower property taxes. The loan estimate, filed in Georgia’s Fulton County court, clearly states “Property Use: Vacation Home,” and includes a stipulation that the primary residence requirement exists “unless Lender otherwise agrees in writing.”
Despite the mounting evidence, the Trump administration remains unmoved. Bill Pulte, who first broadcast the fraud allegations and referred the case to the Department of Justice, continues to insist that Cook’s actions are suspect. “If Dr. Cook solicited estimates as a vacation home and then entered into a mortgage agreement as a primary residence, that is extremely concerning, and in my opinion, evidences further intent to defraud,” Pulte posted on social media. He emphasized that the matter is now under federal investigation, though Cook has not been charged with any crime.
Cook, for her part, has steadfastly denied any wrongdoing and has sued to block her dismissal. Her attorneys argue that the administration’s attempt to remove her is not only unfounded but also a dangerous encroachment on the Fed’s independence. As they told the appellate judges, ousting Cook would send a “destabilizing signal to the financial markets that could not be easily undone.”
The legal wrangling is unfolding against a backdrop of intense political pressure on the Federal Reserve. Since returning to the White House earlier this year, President Trump has regularly lambasted the central bank for its reluctance to cut interest rates, blaming the Fed’s caution on fears that his unpredictable tariff policies could reignite inflation. The central bank has kept rates steady since late 2024, but Fed Chair Jerome Powell recently signaled growing concern about weaker hiring, setting the stage for a much-anticipated rate cut this week. Most economists expect the Fed to lower its benchmark rate by a quarter-point to about 4.1%, a move that could further reduce costs for mortgages, auto loans, and business loans.
Meanwhile, Senate Republicans are racing to confirm Stephen Miran, Trump’s nominee to an open seat on the Fed board, in a bid to further reshape the institution’s leadership. The vote could come as soon as September 15, just a day before the Fed’s rate-setting meeting. The timing has fueled speculation that the administration is seeking to stack the board with loyalists ahead of a crucial monetary policy decision.
Observers say the outcome of the Cook case could have far-reaching consequences for the central bank’s ability to operate free from political interference. “This should be case closed on the Cook mortgage issue,” said Adam Levitin, a professor at Georgetown Law, in comments to The New York Times. “There is no way to maintain a criminal prosecution in light of the disclosure in Cook’s loan application.”
The battle over Lisa Cook’s fate is not occurring in a vacuum. As Reuters pointed out, the personal finances of other government officials and their families have also come under scrutiny, with rival politicians and the media digging into property records and tax filings. In a twist of irony, Reuters recently reported that Pulte’s own father and stepmother had declared two homes in separate states as their primary residence, prompting a Michigan town to revoke a tax exemption and demand back taxes.
For now, all eyes are on the appeals court and the looming Fed meeting. As the clock ticks down, the central bank’s cherished independence hangs in the balance, with the outcome of this legal showdown likely to reverberate through financial markets and the broader economy for months—if not years—to come.
With the evidence mounting in her favor, Lisa Cook’s fight has become a flashpoint in the ongoing struggle over the boundaries of presidential power and the integrity of America’s most important financial institution.
