US Federal Reserve Governor Lisa Cook is facing a formal congressional investigation over allegations of improper mortgage approval practices during the COVID-19 pandemic, The Guardian can reveal.
The House Judiciary Committee, led by Republican Jim Jordan, has launched a probe into claims that Cook may have violated federal ethics rules and potentially criminal statutes by authorising mortgages for two rental properties in 2020 while serving on the Fed's board.
Details of the allegations
According to documents obtained by the committee, Cook secured mortgages for two investment properties in Maryland during the early stages of the pandemic. The investigation centres on whether these transactions complied with Federal Reserve regulations and government-wide ethics standards.
The committee has requested extensive documentation from the Federal Reserve, including all communications related to the mortgage approvals and Cook's financial disclosure forms from the relevant period.
The Federal Reserve's response
In a statement to The Guardian, a Federal Reserve spokesperson said: "We are aware of the committee's request and will respond appropriately. The Federal Reserve takes ethics compliance seriously and all officials are expected to adhere to the highest standards of conduct."
The spokesperson declined to comment specifically on the allegations against Cook, noting that the matter is under review.
Political context and implications
The investigation comes at a sensitive time for the Federal Reserve, which continues to navigate complex economic challenges including persistent inflation and uncertainty in housing markets.
Cook, who joined the Fed's board in 2022 after a confirmation process that highlighted her expertise in economics and financial regulation, now faces scrutiny that could impact her standing within the central bank.
Legal experts suggest that while ethics investigations of senior Fed officials are rare, they can have significant consequences for both the individuals involved and the institution's reputation.
The House Judiciary Committee has given the Federal Reserve until October 15th to produce the requested documents, setting the stage for a potentially contentious autumn in Washington financial circles.
