The Trump administration has filed a second criminal referral against Federal Reserve Board Governor Lisa Cook, accusing her of mortgage fraud, just as Cook filed a lawsuit against President Donald Trump for what she calls an illegal attempt to remove her from her position.
Federal Reserve Oversight Director William Pulte announced the new referral Thursday night on X, declaring, “3 strikes and you’re out.”
“Lisa Cook needs to step aside,” Pulte said in a statement. “With the evidence emerging about her third mortgage and alleged misrepresentations to the federal ethics office, she is causing serious harm to the integrity of the Federal Reserve. How is Chair Jay Powell okay with this behavior?”
The first referral, submitted on Aug. 26 to Attorney General Pam Bondi, accused Cook — the first Black woman to serve on the Fed’s Board — of falsifying mortgage documents. According to the allegations, Cook signed mortgage papers for two different homes, one in Michigan and another in Atlanta, both claiming to be her “primary residence,” and the signatures were dated just two weeks apart in the summer of 2021.
The second referral expands the accusations, this time citing a third property in Cambridge, Massachusetts. Pulte claims that Cook called the property her “second home” in a 15-year mortgage document in December 2021 but reported it weeks later on a federal ethics disclosure form as an investment or rental property.
The renewed allegations come just hours after Cook filed a lawsuit against Trump, challenging his attempt to dismiss her from the Fed Board earlier in the week. Trump had publicly demanded Cook resign and later moved to fire her, citing the initial referral as justification — a move that legal experts and Democrats argue violates the Federal Reserve Act.
“This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position,” the lawsuit states, warning that allowing such action would mark the first time in history a Fed governor was removed without cause.
Cook’s legal team argues that the President’s actions infringe on her Fifth Amendment due process rights and statutory protections under the Federal Reserve Act, which requires that any removal be based on a proven cause. The suit demands an injunction confirming her position on the Board and protecting the central bank’s independence.
The legal filing names Trump, Fed Chair Jerome Powell, and the Board of Governors as defendants. A hearing for a temporary restraining order is scheduled for 10 a.m. EDT Friday before U.S. District Judge Jia Cobb.
If Cook prevails, the court could order that she remain an active Fed governor and reaffirm that Board members cannot be dismissed without clear evidence of cause. The suit also seeks reimbursement for legal costs and attorney fees under the Equal Access to Justice Act.
Since returning to the White House in January, Trump has leveraged executive powers to target political opponents, including revoking security clearances for attorneys and firms connected to his critics. Two other prominent Democrats, New York Attorney General Letitia James and Sen. Adam Schiff of California, have also faced mortgage fraud accusations from the administration.
The dispute with Cook comes as Trump continues to pressure Powell to lower interest rates, though Powell has repeatedly emphasized that the Fed’s policies remain independent of political influence.
Democrats have condemned the administration’s actions as an illegal power grab. Senator Elizabeth Warren (D-Mass.), ranking member of the Senate Banking, Housing and Urban Affairs Committee, issued a sharp rebuke Thursday night.
“The Fed makes decisions based on economic data — not political pressure,” Warren said. “This move would undermine global confidence in our economy, hurt working families, and it’s flat-out illegal. Trump is trying to turn the Federal Reserve into the ‘Central Bank of Trump.’”
