Fed gov probe continues; bill to give agents ‘clear legal status’ 

This week in Washington, D.C., the conflict between President Donald Trump and Federal Reserve Gov. Lisa Cook escalated again with the announcement that Trump has created a committee to investigate the central bank official.

Elsewhere in the nation's capital, Freddie Mac has experienced another leadership shakeup, and the Federal Housing Finance Agency (FHFA) said it plans to cut the budget for its independent watchdog arm.

Meanwhile, HUD is launching a new investigation into Wells Fargo over alleged Fair Housing Act violations. And in a potentially positive development for real estate professionals, two U.S. senators have introduced legislation that would recognize agents as independent contractors under federal law.

White House committee to investigate mortgage fraud allegations

On Oct. 7, Trump issued a memorandum announcing the establishment of a committee of inquiry to investigate allegations that Cook "made false statements in connection with one or more mortgage instruments." Trump and others within his administration have accused Cook of lying on mortgage applications prior to her time at the Fed. Trump attempted to fire her last year over her alleged actions.

Cook, who has not been charged with a crime, has denied any wrongdoing and sued to keep her job. The Supreme Court in June allowed Cook to continue serving on the central bank's board of governors while her lawsuit against the president proceeds.

In the memorandum, Trump instructed the new committee to "investigate the allegations against Governor Cook and report to me whether there is 'cause' for Governor Cook's removal." It also scheduled an in-person hearing to "consider the evidence and allegations" on Nov. 5.

In a statement to The New York Times, attorneys representing Cook expressed "grave doubts that this 'hearing' is a legitimate one that would conform to the law." If, however, the committee's investigation is objective, "the conclusion will be that Governor Cook did not commit mortgage fraud, leaving no cause to remove her from the Federal Reserve Board," they added.

NAR backs bill that would codify agents as independent contractors

This week, NAR applauded the introduction of new legislation that would affirm agents' roles as independent contractors.

On Sept. 30, Republican Sen. Mike Lee of Utah introduced the Direct Seller and Real Estate Agent Harmonization Act, which is co-sponsored by fellow Utah Sen. John Curtis. A companion bill was introduced in the House last year by Rep. Kevin Kiley, a California independent.

The Senate bill would ensure that federal law recognizes agents as independent contractors, a change that Lee said would give them "clear legal status."

In an Oct. 6 statement, NAR EVP and Chief Advocacy Officer Shannon McGahn added that the legislation would "provide important clarity under the Fair Labor Standards Act and ensure real estate professionals are treated fairly and consistently under federal law."

"Independent contractors are a vital part of the real estate economy," McGahn said, "and this legislation affirms their role while reducing unnecessary confusion and regulatory burdens."

HUD launches probe over alleged Fair Housing Act violations

HUD is investigating whether Wells Fargo's attempts to boost homeownership among Black Americans violated the Fair Housing Act. The Wall Street Journal was first to cover the investigation's launch.

In an Oct. 7 letter to Wells Fargo's chairman and CEO, HUD Assistant Secretary for Fair Housing and Equal Opportunity Craig Trainor cited alleged actions by the bank to offer products or product terms "based on race" during former President Joe Biden's administration.

"In response to your bank's repeated public promotion of explicit race-based lending policies, I have directed the Office of Special Investigations to investigate Wells Fargo for potential fair housing violations," Trainor wrote, adding that his office "may file a complaint" against the company depending on the outcome of its investigation.

HUD Secretary Scott Turner suggested in an Oct. 7 statement that, regardless of whether Wells Fargo violated the law, "its practice of dividing Americans based on race is immoral, unethical and un-American."

Freddie Mac ejects 11-year leader

Anil Hinduja, an executive who has been with Freddie Mac for over a decade, no longer works for the enterprise, according to a Sept. 30 filing with the U.S. Securities and Exchange Commission. Hinduja, who was Freddie Mac's EVP and chief risk officer, joined the GSE in 2015, according to his LinkedIn page. His employment ended Oct. 1, and a reason for his departure was not listed.

The filing also stated that John Glessner, who previously served as Freddie Mac's EVP of investments and capital markets, would be stepping into Hinduja's role, effective Oct. 1.

The moves are the latest in a series of staffing shakeups at both Freddie Mac and Fannie Mae, which have seen several executives come and go since the start of Trump's second term.

FHFA significantly trims OIG budget

The FHFA said it is cutting the budget for its Office of Inspector General (OIG) after discovering that the watchdog "was an extraordinary budgetary outlier among its peer OIGs," according to a Sept. 30 announcement.

The cuts reflect the FHFA's "responsibility to ensure that every dollar is used responsibly, efficiently, and for a clearly documented purpose," the agency said, adding that it "fully supports the independence and mission" of the OIG.

But the OIG disagrees. In a Sept. 30 letter, James Hodge, the acting principal deputy inspector general for the FHFA OIG, said the new budget allotment reflects a 61.3% reduction from the watchdog's 2026 operating budget and a 63.6% reduction in its requested budget for fiscal year 2027.

If the budget cut stands, Hodge wrote, it "will substantially inhibit our ability to conduct independent, objective, and effective audits, reviews, and assessments of the Agency's programs and operations and criminal investigations."