Senate Banking Republicans said Tuesday they would block a committee vote on whether to advance five Federal Reserve Board nominees until they get more information about Sarah Bloom Raskin’s involvement in a fintech company.
Sen. Patrick J. Toomey, R-Pa., the committee’s ranking Republican, said his party would boycott the vote scheduled for this afternoon, denying the quorum needed to advance six nominees: five to the Fed, including Chairman Jerome Powell, and one to the Federal Housing Finance Agency.
President Joe Biden nominated Raskin to be the Fed’s vice chair for supervision, a position that would allow her to set the Fed’s regulatory agenda. Republicans criticized her views on climate change and financial risk, but lately have focused their objections to her involvement with Reserve Trust, a Colorado-based fintech company that was granted a Federal Reserve master account while she was on the company’s board of directors.
“Important questions about Ms. Raskin’s use of the ‘revolving door’ remain unanswered largely because of her repeated disingenuousness with the Committee,” Toomey said in a statement. “All senators — not just Banking Republicans — deserve straightforward and honest answers from Ms. Raskin before having to cast a vote on her nomination.”
Raskin joined the company’s board of directors in 2017, after a three-year stint as the second-in-command at the Treasury Department. Before joining Treasury, Raskin was on the Federal Reserve board from 2010 to 2014.
Raskin sold her Reserve Trust shares for almost $1.5 million in 2020, according to personal financial disclosures filed by her husband, Rep. Jamie Raskin, D-Md.
The Federal Reserve Bank of Kansas City first denied and later granted Reserve Trust access to the Fed’s payment system while Raskin was on the company’s board. Both the Kansas City Fed and Raskin have denied any improper behavior.
In response to written questions from Toomey, Raskin said she did not recall whether she had communicated with the Kansas City Fed or Federal Reserve regarding the application.
“Had I done so, I would have abided by all applicable ethics rules in such communications,” Raskin wrote.
The Kansas City Fed has neither confirmed nor denied contact, but said such communication would be “routine” when evaluating a company’s master account application. The regional Fed bank said it reversed its decision because Reserve Trust changed its business model.
Toomey said Republicans would attend the markup and allow votes to go forward on the other five nominees if Raskin was removed from the line-up.
“Committee Republicans aren’t seeking to delay her vote. We’re seeking answers. Until basic questions have been adequately addressed, I do not think the Committee should proceed with a vote on Ms. Raskin,” he said.
The impasse would hold up nominations of Powell, Fed Board member Lael Brainard to be vice chair, Lisa Cook and Philip Jefferson to join the board, and Sandra Thompson to lead the Federal Housing Finance Agency. If confirmed, Cook would be the first Black woman to join the Fed board, and Jefferson would be the fourth Black man to do so.
Senate Banking Chairman Sherrod Brown, D-Ohio, criticized Toomey’s decision, saying it would put the economic recovery from the pandemic at risk.
“Americans depend on us to get these nominees on the job as soon as possible. If my colleagues are as concerned about inflation as they claim to be, they will end the theatrics and show up today to do their jobs for the American people,” Brown said in a statement. “Any actions to delay this vote will hurt workers, their families, and our recovery.”
