US Justice Department Urges Fed Chair Powell to Dismiss Governor Cook over Mortgage Fraud Allegations

On August 21 (local time), the U.S. Department of Justice urged Jerome Powell, Chair of the Federal Reserve (Fed), to dismiss Fed Governor Lisa Cook, who has recently been embroiled in allegations of mortgage fraud.

AP Yonhap News

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According to Bloomberg News, the Department of Justice sent a letter to Chair Powell on this day, recommending Cook's dismissal and stating that "further investigation by the Justice Department is necessary" regarding Governor Cook.

Ed Martin, the Justice Department's pardon officer, wrote in the letter, "I now recommend that Governor Cook be removed from the Board," and added, "Dismiss her today before it is too late!" He further argued, "There is not a single American who believes it is appropriate for Governor Cook to continue her duties under such a cloud of suspicion."

Governor Cook is suspected of mortgage fraud for purchasing a house in Georgia by declaring it as a "residence" to secure favorable loan terms, then converting it to a rental property. President Donald Trump demanded Cook's resignation the previous day in connection with this issue, but Cook responded, "I will not yield to threats of resignation."

Bloomberg, citing anonymous sources, reported, "President Trump prefers that Governor Cook either voluntarily resign or that Secretary Powell dismiss her."

However, Chair Powell does not have the legal authority to dismiss Governor Cook, who was nominated by the President and confirmed by the Senate. Only the President can remove a Fed Governor, and even then, only for just cause.

In U.S. political and financial circles, this situation is being interpreted as a move by the White House to pressure the Fed to cut interest rates. While the official reason is the mortgage fraud allegations, there is underlying intent to replace Fed Governors who do not comply with demands for rate cuts.

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