The Senate Banking Committee’s 12 Democrats said Tuesday they would vote to confirm Sarah Bloom Raskin to be Federal Reserve vice chair for supervision, going through the motions of committee action when a Republican boycott prevented the quorum needed to advance her and five other nominations.
Republicans skipped the committee vote scheduled for Tuesday, saying they wanted more answers from Raskin about her involvement with a Colorado-based fintech company, Reserve Trust. The boycott also delayed consideration of five other nominees — four to the Federal Reserve, including Chair Jerome Powell for a second term, and one to the Federal Housing Finance Agency.
Senate Banking Chairman Sherrod Brown, D-Ohio, asked the clerk to call the vote at the request of Sens. Jon Tester, D-Mont., and Elizabeth Warren, D-Mass. The Democrats voted yes on the nominees en bloc, though Warren asked to be recorded as a no vote on Powell.
But without a majority of its 24 members present, the panel can’t advance the nominees to the floor.
Democrats said the Republican boycott will hobble the Fed as it faces key decisions on how to combat rising inflation. Powell and Lael Brainard, the nominee for Fed vice chair, already sit on the board, but the other three — Raskin, Lisa Cook and Philip Jefferson — would fill out the seven-member board for the first time in almost a decade.
“They’re taking away probably the most important tool we have, and that’s the Federal Reserve, to combat inflation,” Brown said. “Those seven members together make decisions at the March meeting on how they’re going to combat inflation. I want those seven diverse members from different backgrounds with different ideas all at this table.”
Sen. Patrick J. Toomey of Pennsylvania, the committee’s ranking Republican, said earlier in the day that Republicans would show up for votes on the other five nominees if the vote on Raskin was left off the agenda.
Brown shut down that option.
“You can’t run a democratic government that way,” he said. “If you start breaking them up, Sen. Toomey then can decide who even should come to a vote.
“We’re going to keep trying, keep talking and hope that some of them realize they need to do their jobs,” he said of committee Republicans.
Brown said Democrats have the 50 votes needed to confirm the nominees if they make it out of committee.
White House spokeswoman Jen Psaki on Tuesday called Raskin “one of the most qualified individuals to ever be nominated to the Federal Reserve. She’s made the strongest ethics commitments in the history of the Fed, even as she’s made extensive disclosures to the Banking Committee as a natural part of the process.”
“Our focus right now is on working with Chairman Brown on moving these nominees through the committee,” she added.
Republicans criticized Raskin’s views on climate change and financial risk, but lately they have focused their objections on 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.
“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,” Toomey said.
The impasse is holding up not only the nominations to the Fed board, but also of 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.