Feb 15, 2022 - Economy

Senate Republicans delay vote on Fed nominees

Sarah Bloom Raskin and Senator Pat Toomey

Sarah Bloom Raskin and Sen. Pat Toomey. Photo: Ken Cedeno-Pool/Getty Images

Republican members of the Senate Banking Committee will boycott a planned Tuesday afternoon vote to advance five Biden nominees to lead the Federal Reserve, denying the panel a quorum.

Driving the news: They are demanding that Democrats wait to hold a vote on Sarah Bloom Raskin, tapped to be the Fed's top bank regulator, until she answers more questions about her board service for a financial technology company.

Why it matters: Raskin has become the focal point for conservatives' efforts to prevent Biden from filling out powerful Fed leadership positions. Now, controversies involving Raskin are poised to slow confirmation of other nominees, including a second term for chair Jerome Powell.

  • Senator Pat Toomey (R-Pa.), the ranking member of the committee, said he and fellow Republicans are willing to allow a vote on nominees they may oppose on ideological grounds, including Lisa Cook, but that they will not give the committee a quorum for those votes unless Raskin's vote is delayed.

The backstory: Following years of service at the Fed and the Obama Treasury Department, Raskin served on the board of directors of Reserve Trust, a Colorado-based fintech company.

  • During her service, Reserve Trust, obtained a "master account" with the Federal Reserve Bank of Kansas City, giving it access to the financial system that other fintechs have sought unsuccessfully.
  • Toomey has said that Raskin called the Kansas City Fed on behalf of the Reserve Trust, making the episode an example of revolving door capitalism and accusing her of lack of candor.

More broadly, conservatives oppose Raskin because of past comments and writings arguing that financial regulators should use their powers to try to reduce the flow of capital to fossil fuel industries.

The bottom line: The ball is now in Democrats' court. They can either move the four non-Raskin nominees quickly or slow down and leave vacant seats on the Fed for longer.

Go deeper: Sarah Bloom Raskin's master account mess

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