Reed & Warren Demand Answers Regarding Suspicious Ouster of FHFA’s Internal Watchdog

WASHINGTON, DC - As the Trump Administration tries to avoid independent oversight and take unjustified steps to possibly cover up misconduct by a senior official at a key housing agency, U.S. Senators Jack Reed (D-RI) and Elizabeth Warren (D-MA), the Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, are demanding to know why the acting inspector general (IG) for the Federal Housing Finance Agency (FHFA) was ousted in the midst of an investigation into potentially unlawful administrative actions by President Trump's FHFA Director Bill Pulte.

The FHFA IG, who serves as an independent, internal watchdog at the agency, was removed at a time FHFA Director Pulte is playing an unprecedented partisan role in using government resources to target President Donald Trump's perceived political enemies.

Reed and Warren are demanding answers and accountability surrounding the IG's removal, which occurred in flagrant violation of legal removal procedures.

"Federal law requires that Congress be notified and provided with a justification at least 30 days before an inspector general is removed from office. The Administration did not provide notice or an explanation for Mr. Allen's firing, but FHFA's website currently lists the Inspector General position as vacant. According to a November 3rd Reuters news article, Mr. Allen was removed from his position just as he was preparing to notify Congress that FHFA was not cooperating with the Inspector General's office," Reed and Warren wrote.

FHFA oversees key elements of the mortgage industry. Senator Reed helped create FHFA, which was established under the Housing and Economic Recovery Act of 2008 and oversees and manages two government-sponsored enterprises (GSEs) known as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), which guarantee and securitize mortgages to facilitate financing for single-family homes and for apartment buildings.

Given the suspicious circumstances and timing surrounding the IG's removal, Reed and Warren want to know whether this move could be an attempt to coverup previous misdeeds: "The removal of the Acting Inspector General adds to the cloud of uncertainty hanging over FHFA, which, under Director William J. "Bill" Pulte, has operated in a highly partisan and legally questionable fashion. As we noted in the enclosed letter to the former FHFA Inspector General at the very start of Mr. Pulte's tenure, Mr. Pulte appears to have violated Federal law by appointing himself Chairman of the Boards of Directors at Fannie Mae and Freddie Mac, and he seems to have run afoul of FHFA regulations by installing business associates and unqualified partisan loyalists to independent positions at both companies. In the time since, Mr. Pulte has used agency resources to partisanly and publicly accuse three public officials of mortgage fraud and to meddle in the affairs of the Federal Reserve, an independent entity over which he has no jurisdiction," the Senators wrote.

Noting the importance of non-partisan, independent oversight - and echoing recent concerns about IG removals on the Senate floor from Republican Senator Charles Grassley - the Senators expressed concern that inspectors general are being removed from office simply for doing their job and following the facts of a case.

"In its reporting, Reuters also noted that just before his firing Mr. Allen had made efforts to provide information to the office of Lindsey Halligan, the interim U.S. Attorney for the Eastern District of Virginia, who is prosecuting New York Attorney General Letitia James at your direction based on Mr. Pulte's accusations. According to the article, the information Mr. Allen turned over was "constitutionally required" and "potentially relevant in discovery,"" wrote Reed and Warren. "These reports deserve scrutiny and independent investigation, as does the conduct of Mr. Pulte. To that end, we ask that, not later than November 19, 2025, you provide a full explanation for your removal of Mr. Allen and for recent press reports concerning circumstances surrounding his firing, which we have outlined here."

Reed and Warren, along with Senator Lisa Blunt Rochester (D-DE), previously asked the FHFA IG's office to probe the legality of Mr. Pulte's controversial reshuffling of the boards of directors of Fannie Mae and Freddie Mac.

In an effort to evade independent oversight and accountability, the Trump Administration has fired nearly two dozen IGs across the federal government since the start of President Trump's second term. There are 74 statutory IG positions in the U.S. federal government. Additionally, President Trump's Office of Management and Budget (OMB) has directed a blockade on federal funding to the Council of the Inspectors General on Integrity and Efficiency (CIGIE), which supports IGs and helps prevent waste, fraud, and abuse.

Full text of the letter follows:

The Honorable Donald J. Trump

President

The White House

1600 Pennsylvania Ave, N.W.

Washington, D.C. 20500

Dear President Trump:

We write regarding your apparent removal of Mr. John "Joe" Allen from his post as the Acting Inspector General of the Federal Housing Finance Agency (FHFA).

Federal law requires that Congress be notified and provided with a justification at least 30 days before an inspector general is removed from office. The Administration did not provide notice or an explanation for Mr. Allen's firing, but FHFA's website currently lists the Inspector General position as vacant. According to a November 3rd Reuters news article, Mr. Allen was removed from his position just as he was preparing to notify Congress that FHFA was not cooperating with the Inspector General's office.

The removal of the Acting Inspector General adds to the cloud of uncertainty hanging over FHFA, which, under Director William J. "Bill" Pulte, has operated in a highly partisan and legally questionable fashion. As we noted in the enclosed letter to the former FHFA Inspector General at the very start of Mr. Pulte's tenure, Mr. Pulte appears to have violated Federal law by appointing himself Chairman of the Boards of Directors at Fannie Mae and Freddie Mac, and he seems to have run afoul of FHFA regulations by installing business associates and unqualified partisan loyalists to independent positions at both companies. In the time since, Mr. Pulte has used agency resources to partisanly and publicly accuse three public officials of mortgage fraud and to meddle in the affairs of the Federal Reserve, an independent entity over which he has no jurisdiction.

In its reporting, Reuters also noted that just before his firing Mr. Allen had made efforts to provide information to the office of Lindsey Halligan, the interim U.S. Attorney for the Eastern District of Virginia, who is prosecuting New York Attorney General Letitia James at your direction based on Mr. Pulte's accusations. According to the article, the information Mr. Allen turned over was "constitutionally required" and "potentially relevant in discovery."

These reports deserve scrutiny and independent investigation, as does the conduct of Mr. Pulte. To that end, we ask that, not later than November 19, 2025, you provide a full explanation for your removal of Mr. Allen and for recent press reports concerning circumstances surrounding his firing, which we have outlined here.

Thank you for your attention to this serious matter.

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