Sarah Bloom Raskin steps down as Biden’s pick for top Fed banking regulator

WASHINGTON — Sarah Bloom Raskin, President Biden’s nominee to become the government’s most powerful banking regulator, withdrew from consideration Tuesday, the White House said, amid opposition to her nomination from Republicans and of a key Democrat.

The pullout is a blow to the Biden administration, which has struggled to advance its financial nominees through the equally divided Senate. It came a day after Senator Joe Manchin of West Virginia, a key Democratic vote in the equally divided chamber, said on Monday he could not support Ms Raskin’s nomination, citing her views on the struggle against climate change.

“Despite her preparation – and despite being confirmed by the Senate with broad bipartisan support twice in the past – Sarah has been the subject of baseless attacks from industry and advocacy groups. ‘conservative interests,’ Mr Biden said in a written statement.

In January, Mr. Biden appointed Ms. Raskin as vice president of banking supervision at the Federal Reserve, which plays a key role in overseeing the largest U.S. financial companies, including JPMorgan Chase & Co., Bank of America . Corp.

and Citigroup Inc.

She previously served at the Fed and as a senior Treasury Department official during the Obama administration. Prior to that, she served as the State Commissioner for Financial Regulation in Maryland. She is a law professor at Duke University and is married to Rep. Jamie Raskin (D., Md.).

For weeks, Ms. Raskin’s nomination has been stalled at the Senate Banking Committee after opposing Republican lawmakers refused to attend a crucial committee vote. That deprived Democrats of the quorum needed to advance her to the full Senate along with President Biden’s four other Fed picks, including Chairman Jerome Powell, who has been nominated for a second term as head of the central bank.

Her withdrawal could soon end this standoff, she wrote in a three-page letter to Mr. Biden dated Tuesday.

“If I walk away from this confirmation process, there can no longer be an excuse for a continued boycott of the ‘notice and consent’ process of the Constitution and the corresponding refusal of the Senate to address real economic needs. of our nation,” Raskin wrote.

Senate Banking Committee Chairman Sherrod Brown (D., Ohio) told reporters he would travel this week to advance the other four Fed nominees.

“Republicans have engaged in a campaign of spurious smear, distorting Ms. Raskin’s views beyond recognition and launching unsubstantiated attacks on her personality,” Brown wrote in a statement.

Republicans, particularly in energy-producing states such as Pennsylvania and Wyoming, were opposed to Ms Raskin in part because of her 2020 criticism of the Treasury Department and the Fed providing loan support large-scale emergency response to help businesses during the pandemic. She said backstops should have been designed to avoid lending to highly indebted fossil fuel companies.

“The Senate’s bipartisan rejection of Sarah Bloom Raskin’s nomination sends a powerful message to the Fed and all financial regulators that it is not their job to allocate capital or stray from their mission to pursue foreign or politically charged campaigns,” said Sen. Pat. Toomey (R., Pa.) said in a written statement.

The Biden administration has struggled to advance its nominees to the top finance posts through an evenly divided Senate. Saule Omarova, an academic recruited for a separate position overseeing major national banks, withdrew from the exam in December amid objections from Republicans and some Democrats.

It is unclear who Mr. Biden can appoint in place of Ms. Raskin to become Vice Chairman of Fed Oversight. The administration had previously considered former Consumer Financial Protection Bureau director Richard Cordray for the Fed job. But it can be difficult for the White House to find candidates who can appeal to progressive voices in the Democratic Party, such as Massachusetts Sen. Elizabeth Warren – who has backed Ms Omarova and Ms Raskin – and also appeal to centrists who have come there. opposites.

Prolonged delays in allocating Fed leadership positions have slowed regulatory policy decisions. These issues include a potentially significant change in how the Fed accounts for Treasuries and deposits held at the central bank in the so-called supplemental lender leverage ratio. The Fed allowed a pandemic-related temporary reprieve to capital requirements to expire last spring, but it promised to consider a broader overhaul of the rule’s treatment of ultra-safe assets.

Write to Andrew Ackerman at [email protected] and Ken Thomas at [email protected]

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