Federal Reserve Member Refuses to Resign Amid Mortgage Fraud Allegations

The Federal Reserve Board member has refused to resign amidst allegations of mortgage fraud, sparking a political storm. The member, through a spokesperson, stated via email that they have no intention of resigning due to social media accusations. As a member of the Federal Reserve, they take personal financial history issues seriously and are currently compiling accurate information to address reasonable doubts.

The controversy began when the of the United States, Donald Trump, called for the member's immediate resignation on social media. This move is part of a broader effort by the Trump administration to intensify legal scrutiny of Democratic appointees and officials, further increasing pressure on the Federal Reserve. Earlier that day, the Director of the Federal Housing Finance Agency (FHFA), a staunch ally of Trump, urged the Attorney General to investigate two mortgage loans taken out by the member.

The allegations suggest that the member may have committed criminal acts, including falsifying bank documents and property records to secure more favorable loan terms, potentially violating mortgage fraud laws. The member is accused of purchasing a property in Ann Arbor, Michigan, in 2021 and obtaining a 15-year, 203,000 dollar mortgage, with a clause requiring the property to be their primary residence for at least a year. Two weeks later, the member secured a 30-year, 540,000 dollar mortgage on another property in Georgia, also claiming it as their primary residence.

The Director of the FHFA also called for an investigation into whether the member falsely stated their living situation by subsequently renting out the Georgia property. The Director cited four criminal statutes, urging the Attorney General to investigate whether the member's actions constituted potential charges. The member was nominated by the previous U.S. President, Joe Biden, and took office in 2022, becoming the first African American woman to hold the position. They were later nominated by Biden for a full term, which would expire in 2038.

This is not the first time the Trump administration has made mortgage fraud allegations against prominent Democrats, including California Senator Adam Schiff and New York Attorney General Letitia James, both long-time political opponents of Trump. The current allegations against the member mark an expansion of this strategy to the Federal Reserve.

Allies of Trump are currently pressuring the Federal Reserve to lower interest rates and calling for the resignation of Federal Reserve Chairman Jerome Powell before his term ends in May. However, no charges have been filed, and it is unclear whether the Attorney General will launch an investigation. Both the Department of Justice and the Federal Reserve declined to comment, and the member did not respond to requests for comment.

If the member were to resign, it would create another vacancy on the Federal Reserve Board, following the unexpected early resignation of another Biden-nominated member. Trump has already appointed a key economic advisor to fill that vacancy. The advisor is expected to complete the remaining term, which was set to end on January 31, 2026. This appointment is seen as Trump's first significant move to reshape the Federal Reserve leadership if he were to secure a second term.

In recent months, Trump has had a contentious relationship with the Federal Reserve's decision-making body, particularly with Chairman Powell. Trump has repeatedly pressured Powell to implement interest rate cuts and a more accommodative monetary policy, even publicly calling for his resignation. However, Powell has remained steadfast in his position.

The term of the current Federal Reserve Chairman, Jerome Powell, is set to expire next May. Potential candidates for the position include current member Christopher Waller, former member Kevin Warsh, and the Chairman of the National Economic Council, Kevin Hassett. Previously, the current U.S. Treasury Secretary, Janet Yellen, was considered a front-runner for the position, but Trump recently revealed that Yellen had informed him of her unwillingness to be nominated for the role.