Senate Banking Committee Republicans skipped out on a vote Tuesday for President Biden’s nominees to the Federal Reserve Board, delaying confirmations tied to five of seven seats on the central bank’s governing body at a precarious time for the economy.
The nomination of Sarah Bloom Raskin for vice chair for supervision is the primary bone of contention. Republicans have criticized her as too much of an activist on climate-change policy, and they have also raised questions about whether she interceded with regulators on behalf of a fintech company on whose board she served at the time.
The 12 Republicans on the banking committee did not appear at its scheduled afternoon vote for Raskin and four other nominees: Jerome Powell for chairman, Lael Brainard for vice chair as well as Lisa Cook and Philip Jefferson to be governors.
That left the committee without a quorum and Chair Sherrod Brown, D-Ohio, stalling for time.
“I urge my Republican colleagues to return to the table, to vote their conscience,” Brown said. “Let them vote no if that’s what they believe, but make them vote, and let the Senate fulfill its solemn duties. I will delay votes on these nominees. We will update you all when we’ve rescheduled.”
In a statement, the committee’s top Republican, Sen. Pat Toomey of Pennsylvania, said he met last week with Brown and said his fellow party members would support moving forward with a vote on the nominees — except for Raskin.
Anticipating the potential boycott, Brown said during a separate committee hearing Tuesday morning that he and Toomey had agreed on the date for the votes more than three weeks ago and the maneuver could put the nation’s economic recovery at risk. The Fed is scheduled to meet March 15 to decide on how quickly it should raise rates to cool down recent signs of accelerating inflation.
“Americans are depending on us to get them on the job as soon as possible,” Brown said. “If my colleagues are as concerned about inflation as they claim to be, they will not slow down this process, which will only hurt workers, their families and our recovery.”
Toomey has objected to Raskin as the pick for the Fed’s top banking regulator over her stance on addressing climate risk in the banking sector and has warned that she would use her position to “choke off credit to disfavored industries,” he said in the statement Tuesday.
Toomey also pointed to objections raised by Sen. Cynthia Lummis, R-Wyo., during Raskin’s confirmation hearing earlier this month. Lummis had asked Raskin whether she had used her prior positions as a Fed governor and Obama-era Treasury Department official to help Reserve Trust — a fintech Raskin sat on the board of between 2017 and 2019 — receive a master account with the Federal Reserve. Raskin has denied any wrongdoing. Toomey blasted her performance during the Feb. 3 hearing before the banking committee and criticized her responses to written follow-up questions about her ties to Reserve Trust as “nonanswers.”
“Committee Republicans aren’t seeking to delay her vote,” Toomey said in the statement released Tuesday morning. “We’re seeking answers.”
Raskin took the brunt of Republican questions during the nomination hearing but repeatedly stated the vice chair for supervision’s role does not involve forcing banks to make financing available to chosen industries.
“The Fed should not pick winners and losers,” she said during the hearing.
Senate Minority Leader Mitch McConnell weighed in on the situation Tuesday and said in a statement that he was scheduled to meet with Powell in the afternoon.
McConnell said Biden “wisely renominated” Powell to lead the Fed but objected to the choices of Cook and Raskin. McConnell singled out Raskin by claiming she had taken a stance against oil and gas companies.
“Sarah Bloom Raskin has spent recent years pressuring the Fed to stop being a neutral regulator and instead become an ideological left-wing activist body,” McConnell said in a statement.
“Ms. Raskin has argued openly that unelected Fed governors should use their powers to declare ideological war on fossil fuels and affordable American energy. … I urge President Biden to find a better, more mainstream, more bipartisan candidate to serve this crucial institution.”
Raskin’s nomination has split business groups, which usually align behind or against regulatory choices if they weigh in at all.
The U.S. Chamber of Commerce, which represents a broader spectrum of businesses including those in the oil and gas industry, said in a Jan. 27 letter that Raskin’s previous actions and statements “have raised concerns.”
But some banks in the heart of oil country have already begun assessing the threat of climate change to their commercial lending businesses. And the American Bankers Association issued a statement in January congratulating Raskin, Cook and Jefferson on their nominations.
“The nominees would bring a wide range of economic, regulatory and academic experience to the Board of Governors, which we have long believed benefits from having a full complement of governors from diverse backgrounds and viewpoints,” ABA CEO Rob Nichols said at the time.
Cam Fine, a former CEO and president of the Independent Community Bankers of America, argued in a recent op-ed that Republican concerns over Raskin’s positions were overblown.
“The economy has been roiled by two financial crises in a little over a decade, so it’s more important than ever that the president select qualified nominees to top bank supervisory roles,” Fine wrote. “Raskin easily clears this hurdle.”