Concerns over Fed nominee may stop Senate from confirming Biden's picks: report

Published at: Feb. 15, 2022

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. The Kansas City Fed later approved 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 full Federal Reserve board of governors to bring down prices and put workers first [...] Americans are depending on us to get these people in the job 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 this process.”

Related: White House reportedly preparing executive order on crypto

Seven members sit on the Fed’s board of governors when fully staffed, which has not happened in roughly ten years. 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. Should they receive more than 50 votes, Powell and Brainard would serve as the Fed board’s leadership until 2026, with Cook and Jefferson serving 14-year terms. Raskin, replacing Randal Quarles as vice chair for supervision, would have a 4-year term if confirmed.

Tags
Regulation
United States
Government
Congress
Federal Reserve
Politics
Related Posts
US Senator Pat Toomey supports digital dollar, nomination of Powell as Fed chair
Pennsylvania Senator Pat Toomey, one of the lawmakers who supported amending the language around crypto in the recently passed infrastructure law, said the United States should lead the world in the adoption of a central bank digital currency. In a Nov. 23 interview with Bloomberg's David Westin, Toomey said the U.S. dollar should have “the most sophisticated capabilities of any currency in the world” as the country could benefit from a digital dollar. However, the senator said the rollout of any U.S. central bank digital currency should not rely on the Federal Reserve as a traditional bank for retail accounts, …
Regulation / Nov. 23, 2021
Fed's Lael Brainard invites Congress to choose whether to compete with China's digital yuan
At her confirmation hearing in front of members of the Senate Banking Committee, Federal Reserve board of governors member Lael Brainard said Congress would ultimately have to decide to move forward with a central bank digital currency, or CBDC. Addressing pro-crypto Senator Cynthia Lummis at the Dirksen Senate Office Building on Thursday, Brainard said the Fed would welcome Congress “taking a very important role” in updating the regulatory framework for cryptocurrencies and digital assets. When questioned as to the possible use of CBDCs to surveil users' financial activities — as Lummis alleged happens in China — Brainard again deferred the …
Regulation / Jan. 13, 2022
Law Decoded: First-mover advantage in a CBDC conversation, Jan. 10–17
Last week saw an unlikely first move in the opening narrative battle around a prospective U.S. central bank digital currency: Congressperson Tom Emmer came forward with an initiative to legally restrict the Federal Reserve’s capacity to issue a retail CBDC and take on the role of a retail bank. This could be massively consequential as we are yet to see a similarly sharp-cut expression of an opposing stance. As a matter of fact, it is not even clear whether other U.S. lawmakers have strong opinions on the matter other than, perhaps, condemning privately issued stablecoins as a digital alternative to …
Regulation / Jan. 17, 2022
US Senate confirms Lael Brainard as Fed vice chair
After weeks of delays due, in part, to partisan obstructionism, the United States Senate has confirmed the nomination of Lael Brainard, a member of the Federal Reserve's board of governors, as the next vice chair of the central bank. In a 52–43 vote on the Senate floor on Tuesday, U.S. lawmakers confirmed Brainard a vice chair of the Federal Reserve for four years, potentially beyond her term as a governor ending in January 2026. Brainard was one of four nominees waiting for approval since Republican lawmakers in the Senate Banking Committee boycotted a February committee, which would have sent the …
Regulation / April 26, 2022
US House Republicans plan to establish crypto-focused subcommittee: Report
Republicans in the United States House of Representatives reportedly plan to step up their oversight of the crypto industry with the creation of a new subcommittee. According to a Jan. 12 report from Politco, North Carolina Representative Patrick McHenry, chair of the House Financial Services Committee, said he planned to set up the subcommittee in part due to “a big hole” in how the committee is currently structured. Arkansas Representative French Hill and Ohio Representative Warren Davidson will reportedly be the chair and vice chair of the subcommittee, respectively, focused on issues related to digital assets, financial technology, and financial …
Regulation / Jan. 12, 2023