The media coverage about President Trump's demand that Federal Reserve Board Governor Lisa Cook resign based on alleged occupancy fraud on a 2021 mortgage application has missed the real story: how terrifyingly inappropriate FHFA Director William Pulte has behaved. Pulte is using control of the GSEs to pursue a political enemies list. That is an incredibly dangerous abuse of office. We do not tolerate this with the IRS, and we should not tolerate it with FHFA. Pulte should resign. 

Pulte has been serving as the attack dog for Trump's attempts to gain control over the independent Federal Reserve Board, first going after Fed Chair Jerome Powell, and now after Cook. I have no idea about the merits of the allegations regarding Cook's mortgage application. If she did commit occupancy fraud, then it goes without saying that she should resign. (I'm not sure if it would be "cause" for her removal, as her mortgage borrowing was outside of the scope of her office, and both loans were from credit unions, which are not under Federal Reserve Board authority, but I want all officials holding the public trust to be beyond reproach.) 

What troubles me here is not the possibility of garden variety fraud by a federal official in her personal capacity. Instead, the real problem here is that Pulte used the apparatus of the FHFA to target a political opponent. Pulte's abuse of office is a far, far greater offense than any personal mortgage occupancy fraud by a federal official. 

I want to emphasize how absolutely extraordinary this is. Pulte's letter to DOJ with a criminal referral is curiously silent on how FHFA learned of the alleged occupancy fraud. Dollars to donuts, however, issues with Cook's loan file weren't caught in some routine audit or the like. No one ever goes back and examines loan applications on performing loans for occupancy fraud; that would entail expenses for no benefit. Instead, 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. That is unheard of.

And do you really think that Lisa Cook was the only one targeted? Unless Pulte somehow had particular knowledge about issues with Cook's application, which is unlikely, then one has to conclude that Pulte handed Fannie and Freddie a list of political enemies and asked for their loan files for review. (Reporters–there's probably a paper trail about this…you might want to fire up your FOIA machines or start calling your contacts at the GSEs…) That's got to be how the DOJ indictment of Senator Adam Schiff and NY Attorney General Letitia James arose too. Think about that: it's basically a redux of Nixon's enemies list for IRS audits.   

Whatever the merits of Cook's case, it is deeply troubling to see politicized targeting of loan applications by Pulte and the FHFA. It's also frankly hypocritical. The same crowd baying for Cook's resignation is also the group that has been complaining about politically motivated debanking, politicized investigations at the FBI, and politically targeted audits by the IRS. (Likewise, there's the hypocrisy of a President who was convicted of mortgage fraud calling on a Fed Governor to resign over alleged mortgage fraud…) 

Pulte's actions are something that should scare all of us: if Cook, Schiff, and James  can be targeted, what stops Pulte from threatening to review the mortgage application of anyone who speaks out. And if politicized mortgage application reviews are somehow ok, won't politicized IRS audits be next? 

Pulte has crossed a really dangerous line in democracy. He should resign.