They had no market value at that time, she said. In response to written questions from Toomey, Raskin said she received the shares when she joined the board. Raskin left the board in 2019 and in 2020 sold almost 200,000 Reserve Trust shares for about $1.5 million, according to financial disclosures filed by her husband, Rep. In the case of Reserve Trust, a Fed master account allows the company to move money directly on the Fed’s ledger without going through a partner bank, like other fintechs must. The accounts grant banks access to the Fed’s payment system, allowing them to execute transactions in central bank money. While she was on the company’s board, the Kansas City Fed denied and then later approved Reserve Trust’s application for a master account. Raskin, a Fed board member from 2010 to 2014 and then second-in-command at the Treasury Department, joined Reserve Trust’s board after leaving Treasury in 2017. Special treatment of a company connected to a former Fed board member undermines trust in the Fed’s “fairness, transparency, and consistency,” Toomey said in the letter. The Fed does not disclose which companies have master accounts, though the banks themselves can share that information if they wish. Toomey, Senate Banking’s ranking Republican, said Reserve Trust is the only state-chartered fintech company to have a Fed master account. She had a three-year stint at the Treasury Department in the interim. Raskin left the Fed board in 2014, and joined Reserve Trust’s board in 2017. Toomey, R-Pa., said Friday in a letter to Fed Chairman Jay Powell.Īn Obama administration executive order barred officials from contacting former agencies or departments to lobby on someone else’s behalf for at least two years after their departures. But in the Fed’s upside-down world, a former Fed Governor can lobby the Fed on behalf of a particular business, concerning an issue that will financially benefit her and the business, and the public has no right to know,” Sen. Raskin had been lobbying Congress on behalf of Reserve Trust she would have had to disclose that fact publicly. Republicans, who already opposed Raskin’s nomination because of her view that climate change poses financial risk, have seized on the fintech episode to paint her as emblematic of the “revolving door” connecting Washington watchdogs and the industries they oversee. Ben Ray Luján’s absence due to a stroke leaves the party with only 49 senators until the New Mexico Democrat’s return. Even if the panel advances her to the floor, Sen. The committee is scheduled to vote on the nomination Tuesday. Senate Banking’s even party split means a Democratic defection could sink Raskin’s nomination to be the Fed’s vice chair for supervision. “If she was telling people what to do from a Fed standpoint, that’s not good.” “Initially I was told there was no there, there, but then my staff said there possibly could be, so I’ve got to download on that,” Tester, D-Mont., said in an interview. Raskin said she didn’t do anything improper. Republicans say Raskin used her influence as a former government official to secure a Fed master account for the Colorado-chartered Reserve Trust, the fintech company where she was a board member from 2017 to 2019. Jon Tester, a key Democrat on the Senate Banking Committee, said he’s taking a closer look at Sarah Bloom Raskin’s involvement in a financial technology company that gained direct access to the Federal Reserve’s payment system as he weighs whether to support her nomination for the Fed board.
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