(Bloomberg) — Senator Joe Manchin said he remains undecided on President Joe Biden’s nominees for the Federal Reserve, including Sarah Bloom Raskin, the embattled pick for vice chair for supervision.
“We had a conversation and we will have more conversations,” the West Virginia Democrat said of Raskin, who he met with earlier this week. “I made no decisions on anybody.”
Manchin’s vote in the 50-50 Senate will be particularly crucial for Raskin, who is facing stiff Republican opposition, including a GOP boycott of a Senate Banking Committee vote on the nominees earlier this week.
Manchin, who for months has been the sharpest Democratic critic of the Federal Reserve’s monetary policy amid soaring inflation, said he’s still reviewing the nominees.
“We’re just basically looking and reviewing everything and talking to my good friends here about all the different concerns people have,” he said, when asked about Republican opposition to Raskin.
Republicans led by Pat Toomey of Pennsylvania oppose Raskin because of her views on climate regulations, but have blocked a vote on her nomination in the Banking panel because they are unhappy with answers she and the Federal Reserve gave about her role as a director at Reserve Trust, a Colorado financial technology company that provides payment services that previously were only available by going to a traditional bank.
Toomey has focused on what he calls a “very obvious discrepancy” between Colorado and Kansas City Federal Reserve regulators in approving the master account for Reserve Trust. Toomey is demanding answers about Raskin’s involvement in Reserve Trust getting the valuable master account, which allows access to the central bank’s payment system.
The Kansas City Fed denied the request in 2017, then the firm changed its business model “and the Colorado Division of Banking reinterpreted the state’s law in a manner that meant RTC met the definition of a depository institution,” the Fed bank said in a Feb. 7 statement.
The Colorado regulator, however, disagreed with that wording. In a statement to CNBC earlier this week, the agency said the Kansas City Fed “misrepresented” its role and that it hadn’t reinterpreted state law.
“We consider the statement that the division ‘reinterpreted’ state law as a misrepresentation of our practice,” the statement said. Officials with the Colorado agency didn’t return telephone calls and emails for comment.
“The Kansas City Fed really owes us an explanation, especially when their comment has been rejected by Colorado banking folks,” Toomey said in an interview at the Capitol. “It would be extremely helpful” in resolving the impasse over Raskin, he said.
Dennis Gingold, co-founder and former chairman of the Reserve Trust company said in a statement to Bloomberg News last week that Raskin had “no role whatsoever” in appealing the Kansas City Fed’s initial denial of the firm’s request for a master account. He said Raskin’s “conduct was appropriate, ethical and correct in every respect.”
Banking Chair Sherrod Brown of Ohio has refused to separate Raskin’s nomination from the rest of Biden’s Federal Reserve picks, including the renomination of Jerome Powell as chair. Democrats’ current strategy is to wait out the Republicans.
“I believe that the Republicans will understand that they can’t just continue boycotting committee hearings that they don’t like the results that are going to happen,” Minnesota Democratic Senator Tina Smith, a member of the committee, said Thursday on Bloomberg Television’s “Balance of Power With David Westin.”
Brown said he plans to try to hold a vote shortly after the Senate returns in March from a week-long recess.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
