Economy News

Republican senator targets Biden’s Fed nominee Raskin

(Reuters) – The U.S. Senate Banking committee’s top Republican on Friday took renewed aim at President Joe Biden’s nominee to a senior Federal Reserve post, Sarah Bloom Raskin, suggesting she had improperly lobbied the head of the Kansas City Fed on behalf of a fintech firm on whose board she then served.

In an interview on Friday with Reuters, Dennis Gingold, the founder of the fintech firm, said that Senator Pat Toomey’s account was “unfair” and that Raskin, nominated to be Fed vice chair of supervision, had acted ethically and correctly.

A White House spokesman said Toomey was waging a “baseless smear campaign.”

The Senate Banking panel, whose members are divided equally between Republicans and Democrats, is to vote on Tuesday on whether to advance Biden’s five Fed nominees for consideration by the full Senate. Members from both parties have indicated support for most of them, including for the renomination of Fed Chair Jerome Powell.

Raskin, however, drew repeated Republican criticism mostly centered on her views on the financial stability risks posed by climate change. Toomey’s public release of his letters about her to Kansas City Fed President Esther George broadened the attack.

Raskin, a former Fed governor, personally rang George in August 2017 about Reserve Trust’s master account application after it had been denied, Toomey wrote in the letters.

“In the wake of Ms. Raskin’s call, the Kansas City Fed changed its mind and granted Reserve Trust a master account in 2018,” Toomey said.

Gingold said he recollected Raskin’s short conversation with George as simply asking her to check that the bank’s staff had the proper information at hand to make its determination.

Kansas City Fed earlier this week said its review of the Reserve Trust’s application “did not deviate” from its normal review process, and that it initially denied the request based on a determination that it was not eligible for the account.

It later approved the firm’s request for a master account, it said, after the fintech company changed its business model and Colorado banking regulators reinterpreted state law so that the Reserve Trust met the definition of depository institution.

In written responses to Toomey’s questions, Raskin said she did not remember any calls made to help Reserve Trust but that any communications “would have abided by all applicable ethics rules.”


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