Legal commentators calling Cook’s firing a crisis are protecting a governor who falsified two mortgages. This is the ordinary work of accountability, and the Justices who blocked the removal last June ought to be embarrassed by the precedent they set.
Let us begin with what is not in dispute. Lisa Cook obtained two mortgages, weeks apart in 2021, and signed each one attesting that the property would be her primary residence. She now claims this was an “inadvertent oversight,” because one of the homes was a vacation property and the lender knew where she actually lived. Perhaps. But the Federal Reserve Act permits removal of a Governor only “for cause,” and knowingly signing two contradictory sworn statements on federally regulated mortgage paperwork is, at minimum, a credible basis for the President to ask the question.
The Supreme Court’s June decision in Trump v. Cook did not vindicate Ms. Cook. It held only that she was “entitled to notice and some opportunity to respond” before being removed. Chief Justice Roberts wrote that, after that response, courts could “assess the validity and sufficiency of such charges.” Good. That is precisely the proceeding the White House has now set in motion. The Aug. 5 letter is the notice. Abbe Lowell’s reply on Wednesday is the response. The case has only just begun.
What the editorial defenders will not acknowledge is the provenance of the allegation. It was not conjured by the White House. It was referred by Bill Pulte, the Director of the Federal Housing Finance Agency, after a standard review of mortgage records. The sneers about Mr. Pulte’s political affiliation tell you more about the critic than about the man himself, who has referred numerous public figures for similar paperwork discrepancies. The referees are doing their job. Their findings are not “pretext” because the President chooses to act on them.
Then there is Ms. Cook’s counter-allegation, which her champions are treating as a knockout punch. In 1993, Mr. Trump reportedly acquired “primary” residence mortgages for two Florida homes seven weeks apart. Treasury Secretary Scott Bessent and Attorney General Todd Blanche have, according to news accounts, done something similar. The implication is that the President has no standing to question Ms. Cook because others have done what she did.
The tu quoque is a deflection, not a defense. If Mr. Trump and his cabinet officers broke the rules, that is a separate matter to be examined separately. It does not cure whatever Ms. Cook signed in 2021. Nor does it answer the structural question: who is to be trusted with the conduct of monetary policy — an unelected Board that signs contradictory paperwork and hides behind a “for cause” provision, or a President elected by the country to set the direction of economic policy?
This brings us to the deeper dishonesty of the defenders of the status quo. “Fed independence” is invoked as though it were written into the Constitution. It was not. It was a policy choice, made by Congress in 1913, and it can be revisited by Congress whenever the people demand it. The statute permits removal “for cause.” The President has now articulated a cause. The Court has confirmed the procedural route. The only thing standing between Ms. Cook and her departure is the slow grinding of that route, and the hope that delay will become denial.
It will not. The Court gave the President a roadmap in June. He is now walking it.
One final note. The Federal Reserve Inspector General has been sitting on a report about the central bank’s headquarters renovations — the same renovations the Trump Administration asked be examined for possible criminal misconduct by former Chair Jerome Powell. That report ought to be released tomorrow, and read in full by every member of the Senate Banking Committee. If the Fed is to be defended as an institution above politics, its officers must be held to standards at least as rigorous as those applied to a single Governor’s vacation-home paperwork. By that measure, Ms. Cook has company. She should not, however, expect that company to save her.