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Members of the U.S. Senate Banking Committee have reportedly divided along party lines regarding President Joe Biden’s pick of Sarah Bloom Raskin as vice chair for supervision for the Board of Governors at the Federal Reserve.
According to a Tuesday report from Reuters, Senator Pat Toomey, the ranking member on the Senate Banking Committee, said he had asked the 12 Republican senators on the committee to not attend a meeting in which members were expected to vote on President Biden’s nominees for the Fed. Toomey reportedly said that Democratic leadership can proceed with “five of the six nominees” put forth by the President and expect Republican support — with the exception of Raskin.
Republicans’ boycott is reportedly due to concerns over allegations that the prospective Fed vice chair for supervision lobbied the president of the Kansas City Fed in 2017 for access to its payments systems on behalf of fintech firm Reserve Trust — Raskin was a board member of the firm at the time. Kansas City has approved the reserve trust's request.
In a Feb. 3 nomination hearing before the Senate Banking Committee, Toomey criticized Raskin’s statements for seemingly advocating for issues “wholly unrelated” to the Fed’s agenda. Senator Cynthia Loomis later questioned Raskin in the same hearing about her alleged involvement in securing access to the Kansas City Fed’s master account for Reserve Trust — the prospective Fed vice chair for supervision neither confirmed nor denied the allegations.
However, in a Tuesday hearing on “Examining the President’s Working Group on Financial Markets Report on Stablecoins,” Senate Banking Committee chair and Democratic Senator Sherrod Brown urged lawmakers to vote on the Fed nominees without delay:
"We need a Federal Reserve Board of Governors to lower prices and put workers first.... The Americans expect us to put these people to work as soon as possible. If my colleagues are as concerned about inflation as they claim to be in this committee and beyond, they will not slow down the process."
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Seven members sit on the Fed's Board of Governors when the staff is full, which has not happened in 10 years or so. Many of the vacancies were the result of terms expiring and board members resigning, giving President Biden the opportunity to shake up the agency’s leadership.
The Senate is planning to vote on Biden’s picks for Fed chair and vice-chair — Jerome Powell and Lael Brainard, respectively — as well as economists Lisa Cook and Philip Jefferson. If they obtain more than 50 votes, Powell and Brainard will head the federal board of directors until 2026, and Cook and Jefferson will be appointed for 14 years. Raskin, replacing Randal Quarles as vice chair of supervision, would have a 4-year term if confirmed.
