Did Collins v. Yellen Lead Trump To Fire Lisa Cook?

Bill Pulte, the director of the FHFA, could investigate the Federal Reserve because Trump could fire the holdover Biden appointee.

President Trump purported to fire Lisa Cook, a member of the Federal Reserve Board, for cause. Here, at least, Trump is not asserting an absolute removal power over the Fed. Wilcox said in dicta the Fed was different than the FTC. And I think under the Solicitor General's position in CASA, the federal government would bind itself to the Supreme Court's holdings, as well as reasoning. I'm not sure how that analysis maps on the flag-burning executive order, but that is a topic for another time.

There is an angle of Cook's firing that has not gotten much attention. The alleged cause to remove Cook is that she falsified terms on a mortgage. And who made that allegation? Bill Pulte. Who is Bill Pulte you might ask? The Director of the Federal Housing Finance Agency (FHFA).

That agency should sound familiar. The FHFA was headed by a single director who served a five year term, and could only be removed for cause. Collins v. Yellen (2021) held that the structure of the FHFA was unconstitutional.

Collins was decided on June 23, 2021. That day, President Biden fired Mark Calabria, who was President Trump's appointee to that position. Biden replaced Calabria with Sandra Thompson, who began her five-year term in 2022. Thompson resigned on the eve of the inauguration.

Do you see the connection? Had the Supreme Court upheld the structure of the FHFA, President Biden's nominee would still be in office, serving out her five-year term. And I suspect she would not be investigating potential mortgage fraud for Lisa Cook. But, in reality, President Trump has his own nominee at the head of the FHFA. And Pulte is using his authority to investigate the Federal Reserve.

One Supreme Court case on the unitary executive begets another Supreme Court case on the unitary executive.

Then again, if the Court had upheld the structure of the FHFA, the road to overruling Humphrey's Executor would have been cut short.

Comments

[roger]

I am shocked, shocked! that Josh doesn't feel like discussing the flag-burning order.

[Stupid Government Tricks]

I am shocked, shocked! that roger doesn't feel like discussing the topic of the post.

[thesafesurfer]

Lisa Cook is a banker who committed mortgage fraud.

[Martinned]

I am told that New Yorkers committing a bit of occasional fraud is so ordinary that prosecuting them would be unconstitutional.

[Krayt]

Going after them because they're your political opponents, faceting concern for rule of law, is something that should not be done.

Don't be angry. Imitation is the sincerest form of flattery. This is your world, with clever thinkers trumpeting surface rationalizations to git 'im.

Or git 'er, as the case may be.

Launch all talking heads!

[Martinned]

Going after them because they're your political opponents, faceting concern for rule of law, is something that should not be done.

So we agree that Trump shouldn't go after Lisa Cook because she won't obey his instructions wrt interest rates?

[y81]

Maybe we agree. Are you saying that Letitia James should not have gone after Trump? If so, we agree. Not that anyone cares.

[Martinned]

I might well. I certainly think that many of the things she said about going after Trump (that were quoted in the Court of Appeals judgment, for example) were ill-advised, to put it mildly. Having said such things, she shouldn't have been anywhere near the case. More generally, it shows why prosecutors shouldn't be politicians or political appointees.

[ravenshrike]

Increasing one's tax bill is not significant fraud. On the other hand, claiming two separate primary residences without living in either one of them, and then renting BOTH of those residences out and not reporting the rental income on your taxes very much IS fraud.

[Doug Heffernan]

Yes, Pulte used the apparatus of the FHFA to target a political opponent. The only way anyone would have noticed a problem with Cook's loan application is that Pulte, as head of FHFA, directed Fannie or Freddie to pull her application.

Thompson wouldn't have done this. Probably no prior head of the FHFA would have done this either. Is that good or bad? That probably depends if it is being done by your side or to your side.

[Kazinski]

I read they have an AI app that they are using to mass screen the mortgage database, so that may not be true they targeted her specifically.

Now they may indeed be cross referencing lists of government officials, but I don't have a problem with prioritizing government officials for enforcement.

And keep in mind that it is perfectly legal to have mortgages on more than one property that were listed as the primary residence on a mortgage application, as long as the mortgages were taken out more than a year apart. Her mortgages were within 20 days, that is not inadvertent.

[Doug Heffernan]

Maybe someday, through a FOIA response or other means, the public will find out if the review of Cook's loan application was initiated manually or done through some non-specific mass process.

If it was done as part of a non-targeted non-individualized mass process, it must just be mere coincidence that democrats that Trump is not particularly fond of (such as Adam Schiff and Letitia James) have been caught up in this non-targeted net.

No republican offenders have been identified yet. Maybe republicans are just especially careful and honest when it comes to mortgage applications. Although no one in the Trump administration has asked the DOJ (or anyone else) to look into the similar allegations against Ken Paxton.

[Michael P]

Or maybe Democrats are especially dishonest cheats when it comes to mortgage applications for second and third homes. If you're going to advocate a partisan explanation, let's go with the one that fits past evidence better.

[Sarcastr0]

Not even you believe that.

Have some self-respect.

[Michael P]

Dude, we already assume you have nothing but denialism. You don't have to actually post a comment to prove the assumption each time.

[Stupid Government Tricks]

Here you are again, discerning what other people believe, in spite of whining whenever someone makes a remark about what you believe.

Stay hypocritical, bud. If it's the only tool in your toolbox, you may as well use it.

[JD85]

Ken Paxton (Texas AG running for senate) did it for three homes - no consequences

[loki13]

"I read they have an AI app that they are using to mass screen the mortgage database, so that may not be true they targeted her specifically."

Fascinating. You read this!

So we have what you read. Now, let's see what the output of the amazing "AI app" is.

Bill Pulte (large donor to Trump and Trump loyalist) was confirmed as director of the FHFA in March. Since then, he has filed three (3) criminal referrals for "mortgage fraud." Please note that he has been ... less cautious in his tweets celebrating his ... accomplishments.

There was Adam Schiff, a senator from California and outspoken critic of Donald Trump.

Then there's Letitia James, the attorney general of New York who famously went after Trump and his businesses in a civil case.

Finally, there's Lisa Cook, a governor on the board of the Fed. By the way, Pulte tweeted in celebration that "Trump becomes the first president ever to remove a sitting Federal Reserve governor" after Trump used Pulte's referral as the pretext to "fire" Cook. Just FYI.

Okay, more background. Obviously, all three deny these claims. As to the "AI App", we know that in Schiff's case, FHFA asked Fannie Mae investigators to specifically investigate Schiff's homes. While the investigators did state that their was a "pattern of possible occupancy misrepresentation" on home loans, they did not conclude a crime had been committed, nor did they use the word fraud at any point.

The referrals, by the way, are also for an investigation. They are not even up to the standard of an indictment.

The first two, at least, have been given to Ed Martin (the less you know about him, the better). But as a reminder of both how bad Martin (and this administration) are-

After receiving a letter from James' counsel (correctly) chastising Martin for behaving like a fool OUTSIDE OF JAMES' HOUSE, Martin sent a letter saying that ... wait for it ... James should resign because, you know, there was a referral.

This is pathetic. This is nothing more than government extortion, sanctioned from the highest levels.

Fish rot from the top. Trump told us who he was, and y'all elected him anyway. It's on you. And your belief in an "AI App." In other news, did you know that "gullible" isn't in the dictionary.

[Kazinski]

Yeah the article is from July 2nd.

https://www.daylightaml.com/blog/the-pulte-palantir-project

"Right Data - Occupancy Misrepresentation:

The lion’s share of fraud that Palantir and Pulte find will be occupancy fraud, so let’s look at what the Right Data means in this context.

It's simple and pervasive: Borrowers falsely claim they will live in the home as a primary residence in order to qualify for lower interest rates and down payments."

[loki13]

Did it even occur to you that this new pilot program was only going to start ... with new mortgages?

See, here's the thing when people start with conclusion and then cast about for possible excuses.

It's always the stupid stuff they throw in. I mean, it's not just so obvious that a program wouldn't result in only three referrals, all of prominent enemies of Trump, right?

It's also that the program that just started ... would start on new applications. It's really hard to believe that you came back to try and justify the "AI App."

I mean, other than point out yet another instance of "Trump Bestie" Peter Thiel getting yet another no-bid government contract that will result in his private company having even more access to all of our private information.

"Drain the swamp." That really meant, "Fill the swamp with Trump's croneys, amirite?"

[Martinned]

And I think under the Solicitor General's position in CASA, the federal government would bind itself to the Supreme Court's holdings, as well as reasoning.

That was always a completely hilarious notion.

[TwelveInchPianist]

Are you suggesting they didnt?

[F.D. Wolf]

When Biden entered office in 2021 and fired a slew of Trump appointees, the media narrative was, "Biden removing Trump loyalists from government." When Trump entered office (again) in 2025 and began firing Biden appointees, the media narrative was, "Trump attacking independence of government agencies."

When Biden fired Trump appointees Sean Spicer and Russell Vought from their posts on the Naval Academy Board of Visitors (despite their statutory 5-year terms), they challenged their firings in court and lost. I suspect Spicer and Vought were less interested in keeping their jobs than in creating a precedent for future presidents. (Which they did).

[David Nieporent]

The attempted whataboutism is of course misplaced, since the statute creating the positions Spicer and Vought held (10 USC § 8468) did not include for cause protections from removal, unlike all of Trump's "controversial" purges.

(Also, the statute provided for three-year terms, not five-year ones, which is irrelevant to the legal issue but is an error by Wolf.)

[Jazzizhep]

Not really whataboutism. It’s more akin to “what’s good for the goose is good for the gander.”

Maybe, like Harry Reid, Dems regret starting a war they aren’t winning. Six, or five and a half, of nine justices smells like victory to me.

[John 4]

More like, “I don’t really care about the law, just vibes.” That’s essentially the MAGA mantra anyway.

[Jazzizhep]

SC said it wasn’t illegal. I guess it’s just illegal if Trump does it?

See goose/gander above.

[pdshaw]

Spicer has said that the lawsuit was pursued to create precedent, though I think it was ultimately the Severino v. Biden decision by the Court of Appeals that will be the one cited for firing members of advisory committees before their terms.

[Michael P]

Did Bill Pulte also drive the plagiarism accusations against Lisa Cook that were another factor in her firing? If so, can I borrow his time machine?

[Sarcastr0]

Just pathetic.

[Stupid Government Tricks]

Name-calling because you have no rebuttal: just pathetic.

[Sarcastr0]

Yeah, sometimes there's no need to engage seriously.

Like this transparently desperate muckraking attempt.

[Stupid Government Tricks]

Perhaps you don't know the meaning of all the words you bandy about.

[ReaderY]

Because Congress, in its wisdom, made even the slightest white lie mistatement on a mortgage application 30-year felony bank fraud, as long as it was material, President Trump is very likely within his rights to fire Lisa Cook, for good cause, without implicating any question about whether Federal Reserve governors can be fired at will without good cause. I expect his action will be upheld by the courts. And I wouldn’t be at all surprised if his administration prosecutes her and seeks a long prison sentence.

Three Felonies A Day has come home to roost. In enacting extremely broad laws, Congress created a world which made it easy for a President to ensnare political rivals in massive criminal prosecutions with draconian sentences over minor-seeming misconduct.

[Social Justice is neither]

This isn't 3 felonies a day activity being looked at, this is deliberate fraud to secure better terms. If this was just inside the term for primary residence beneficial terms or she quickly got out of one because circumstances changed then there might be an excuse but those aren't this reality.

[ReaderY]

When the shoe was on the other foot, you were doing your best to defend Trump with the “everybody does it - this prosecution is baloney” defense. Why the change?

[Jazzizhep]

Circumstances change. I once thought going after political opponents through the courts was a bad thing. The NY courts, and many people on VC, have shown me the error of my ways. Well, prior to Trump being re-elected anyway.

Everybody before Trump; using the courts to go after political opponents is bad.

Dems after Trump; using the courts to go after political opponents is good.

Conservatives after Trump; using the courts to go after political opponents is still bad.

Dems after Biden; using the courts to after political opponents is, once again, bad.

Conservatives after Biden; we leaned our lesson from the Dems. Using the courts to go after political opponents is good.

[Social Justice is neither]

This isn't some novel one-off construction of the law to make the two equivalent, but please keep on defending run of the mill corruption. How'd those cases ultimately turn out and why?

[Reallynotbob]

I'm enjoying watching Trump articulate, and the maga-loyal reinforce, the argument that "infractions" committed before one's tenure in office constitute "cause" for termination.

Eventually one of them will notice that Art.2, Sec. 4, similarly fails to limit "High Crimes and Misdemeanors" to ones committed during the Executive's tenure in office. And those are actual convictions for... financial fraud wasn't it?

[Bob from Ohio]

Sure, go ahead. 3,4, 5 failed impeachments, maybe try for double figures

[Swede425]

Everybody calm down.
This claim of mortgage fraud should be pretty simple to prove/disprove.
Did she check the box that claimed this is her primary residence?
On 2 different mortgages in under a year?
I imagine we'll find out soon.
Prediction: "Oops, did I check that box "yes". I meant to check that box "no". My bad".
I get the feeling that she'll be out of a job. At least this job.

[loki13]

Actually, as someone who has an interest in not having our economy end up like Argentina's in the past ... I don't feel like calming down.

Trump wants to have full control over the fed. After he got hammered originally going after Powell, he's now trying to get enough of the Governors. Why?

I'm guessing the rubes don't know how the system works. Because of course they don't.

Who gets to make US monetary policy? It's not the Fed Chair. It's a vote. There are twelve votes (it's the FOMC). Seven votes are by appointed members (one is the FedChair). Four are by Reserve Bank presidents (they rotate). One is by the Reserve Bank president of NY (doesn't rotate).

Now here is where it gets fun. The Reserve Bank presidents? They can, AFAIK, be hired and fired AT WILL by the appointed members. That's never been an issue ... before. But let's say that Trump gets a majority of the appointed members. Four votes.

When that happens, he can simply order them to fire and hire enough Reserve Presidents to control the FOMC and do what he wants. That's the problem.

He's already got Waller and Bowman. He's nominated Miran. That's three. Which means ... that's right. He needs one more. And if he succeeds in firing Cook, and the other three fall into line ... he's got it. Doesn't need to go through Powell. He's won.

The Fed will be under full Trump control.

[Swede425]

That's a lot of words to say "I don't care if she committed fraud because Trump".

[loki13]

No, that's not it at all. I actually have no idea what she may, or may not have done ... and neither do you. I do think it is blindingly obvious that Trump ordered Pulte to find something ... anything ... he could use as a pretext to "fire her," and that's what Pulte did.

That is what is disturbing. Our government doesn't normally work like that. In other words ... "The King orders that a crime be found on the King's enemy. Go find a crime. That way, the King may do what the King wants."

It's even more disturbing because ... there isn't even an actual criminal investigation or indictment yet.

Of course, I also happen to have a vested interest in not seeing Trump tank the economy and my investments, which I will cop to. And since I have a basic knowledge of economics, and I also know what happens to countries where the political branch takes control of the Fed, I have a very personal concern for this as a matter of policy.

Plus, you know, it's un-American. There's that, too.

[Swede425]

LOL!
Look who is suddenly concerned when he thinks the government is using lawfare to go after political rivals.
Duly noted.
Better late than never, I suppose.
Anyway, back to my point, it shouldn't take terribly long to investigate which little box she checked. Easy peasy.
And you're right, I don't know. Not yet.
But I'm guessing Trump knows. And I've already given my prediction what her response will be. Because it'll be the only one she can use. And now we wait. Tick tock.

[loki13]

"But I'm guessing Trump knows."

Sure. Just like Trump "knew" that Powell screwed up the Federal Reserve building rehabilitation.

Because he didn't know that it wasn't using taxpayer money.
And he didn't know what it entailed.
...and he couldn't understand the difference between different projects.

It's so cute that you continue to think that he tells the truth! Tell me, how will it feel when you finally kick that football, Charlie Brown?

[Swede425]

Calm down, sir and/or madam.
It's just a box. A little, tiny box.
We're just patiently waiting to see how she checked it.
If Trump is wrong, I guess he won't be able to fire her "for cause".
Of course, she sure did hire an expensive lawyer for somebody who claims she didn't do anything wrong. Like check the wrong box.
Tick tock.

[loki13]

"Of course, she sure did hire an expensive lawyer for somebody who claims she didn't do anything wrong."

Of course she did. Because ... and this may shock you ... the DOJ has appointed special (and I do mean SPECIAL) attorney Ed Martin to concoct evidence and tweet about it. You know him, right?

"I am Special Attorney investigating many matters[!]"

That guy.

"If they can be charged, we'll charge them. But if they can't be charged, we will name them. And we will name them, and in a culture that respects shame, they should be people that are ashamed"

That guy.

The person who even the compliant Senate GOP wouldn't confirm as a USA (but would with Pirro!) so he was sent to be the Director of ... I wish I was making this up ... the DOJ's "Weaponization Working Group." But he's also the "Special Attorney for Morgage Fraud" with three cases. You know them.

That guy.

The person who posted photos (in a trenchcoat, in the middle of summer) outside of a person's house ... who had no criminal charges, and then ... when there was no investigation or charges, demanded their resignation ... which is a violation of so many rules I can't even.

That guy.

So yeah, I'd get a good attorney as well.

And given your repeated LOL posts here, and elsewhere, and the fact that you don't seem to be more concerned with trolling than understanding, I'll miss seeing your posts.

Ha! No I won't.

[bernard11]

Lisa Cook is not Trump's "political rival."

[JasonT20]

No. That is an explanation of why it is important that a President shouldn't be stacking the Fed board with lackeys that will lower interest rates just because the President wants to make the economic numbers look good now so that his party doesn't get trashed in midterm elections, rather than to set interest rates with the goal of the best long-term economic success of the country.

[loki13]

Well, it's a two-fer, of course. The FOMC is not just interest rates (although that might be the most important) it's also open market operations (money supply). It's, you know, all your monetary policy stuff.

But don't forget ... before moving to seize the Fed, Trump also took over the BLS.

Which means that he ensured that, when he needs to, he gets to cook the books when it comes to inflation and jobs.

Don't believe your lying eyes. Of course Trump's Fed is doing the right thing. Trump's BLS is telling you it is!

I have to admit, I always assumed that if this sort of thing were going to happen, it would be subtle and slow. Because OF COURSE IT IS TERRIBLE. I had no idea that it would happen, and everyone would see it, and you would still get the rubes saying, "Haha, it makes the libtards cry. Good enough for me."

Silly me. I guess I assumed that at some point, self-interest would prevail over spite.

[Keldonric]

Sigh… the BLS. We just went through some weeks of people alleging the director was personally cooking the data. Meanwhile, zero discussion about how to actually improve the model. I even suggested a regime-switching approach for the CES — one mode for normal times, one for volatility — so estimates wouldn’t get whipsawed the way they do in shocks. Did anyone engage with that? Of course not. Too busy beating up on the ex-director to think about how to make the series more responsive.

[ReaderY]

And here we get to the heart of the problem. By passing sweeping laws making even relatively minor misstatements heavy felonies, Congress enabled what Trump is doing and made it legal. Because it’s a serious felony, courts will be constrained to conclude that the firing is for cause and therefore legal. That’s the problem.

Congress created a legal environment that so completely trusted the Executive to use discretion that it gave the President the power to do what he is doing. This time he is using power Congress actually gave him.

Professor Blackman is very likely right that appointing a crony as head of FHFA gave him access to its databases enablimg him to mine them for dirt on his political opponents, and this action is a result.

Indeed each time he gets one of his cronies appointed the head of a new agency, he can use the resources and databases of that agency to scrutinize his political opponents or those he wants replaced for evidence of some crime or other in exactly the way he did here.

And because Congress created so many serious crimes covering so many things that many people might put in the minor white lie category or might not even be aware is considered wrong, the courts will uphold his actions. He is not only very likely to succeed here, he is very likely to succeed when he repeats the same approach elsewhere.

[Keldonric]

This is the first time I’ve seen Mr. Paxton brought up in this discussions concerning mortgage application irregularities. Given his position as Texas Attorney General, you’d think the mortgage questions would be of particular concern. I expect we’ll be seeing something from Mr. Pulte on X about it any day now.

[loki13]

The future we feared, where fascism becomes so absurd it must be a joke, has already arrived. The punchline?

It's not a joke.

[Keldonric]

Sadly, both sides seem locked into a grim trigger strategy. It would be nice if the incentives were modified so that cooperation became a rational move again.

[Swede425]

Oh?
So this investigation shouldn't take too long.
I mean, how special of an attorney do you have to be to see which box she checked?
The good news for her is that this should be over soon and since she claims to have done nothing wrong, can't be fired.
Foiled again, Trump!
Or maybe not. Tick tock.

[wvattorney13]

It amazes me how many people who "check the wrong box" unanimously make the mistake that benefits them the most financially. I guess the gods must be smiling down on them.

[bernard11]

Selection bias, WVA.

I think the ones who check the wrong box when it hurts them don't get noticed, so the only ones you hear about are those who benefit.