Federal Reserve Governor Lisa Cook won a 5-4 Supreme Court ruling that allows her to remain on the Fed's Board of Governors while her separate lawsuit challenging President Donald Trump's attempt to remove her proceeds. The decision preserves her seat for now, but a Justice Department criminal investigation into allegations of mortgage application fraud — rooted in three home loans Cook obtained in 2021 — keeps her legal exposure very much alive.
The Three Loans at the Center of the Dispute
The mortgages in question were all issued in 2021, before former President Joe Biden nominated Cook to the Federal Reserve Board. In April of that year, Cook secured a 15-year, $361,000 loan at a 2.5% rate on a Cambridge, Massachusetts condominium she had originally purchased in 2002 while teaching at Harvard University. Two months later, she obtained a 15-year, $203,000 mortgage at 2.87% through the University of Michigan Credit Union for a three-bedroom home in Ann Arbor, Michigan — roughly an hour's drive from Michigan State University, where Cook was then a professor. She also carried a 30-year, $540,000 mortgage at 3.25% from the Bank Fund Staff Federal Credit Union on a luxury condominium above the Four Seasons Hotel in Atlanta, Georgia.
The legal concern turns on how borrowers classify a property at origination. Primary-residence mortgages carry preferential terms because lenders treat owner-occupied homes as lower-risk than investment properties or vacation homes. Cook disclosed all three loans in a June 2025 financial filing with the U.S. Office of Government Ethics, which also showed she earned more than $50,000 annually in rental income from the Cambridge condominium.
How the Allegations Reached the Justice Department
The referrals to the DOJ originated with Bill Pulte, a Trump appointee who oversees the federal agency regulating Fannie Mae and Freddie Mac and who now serves as acting Director of National Intelligence. Pulte alleged that Cook represented the Cambridge unit as a second home rather than an investment property, despite the rental income. His referral regarding the Atlanta property noted that Cook affirmed in the loan agreement that the Four Seasons condo would serve as her primary residence within 60 days of closing and for a full year thereafter — the same designation she applied to the Michigan home. The Justice Department confirmed it had opened a criminal investigation into the mortgage fraud allegations. Cook has not publicly explained why two properties simultaneously carried primary-residence designations.
Cook's Defense and What Comes Next
Cook's attorney, Abbe Lowell, denied the allegations in a September 2 court filing, stating that Cook did not commit mortgage fraud. Her underlying lawsuit, filed August 28, challenges Trump's removal attempt as unlawful and argues it threatens the Federal Reserve's institutional independence — a broader constitutional question the Supreme Court has not yet resolved.
The 5-4 ruling keeps Cook in place during litigation, but the criminal probe runs on a separate track entirely. Until the DOJ closes its investigation or brings charges, Cook's position at the Fed carries a legal asterisk that neither the Supreme Court nor her lawyers have erased.