Sarah Bloom Raskin, President Biden’s pick for Federal Reserve bank supervisor, is in hot water over her revolving door roles between the government and private sector.
According to multiple reports Thursday (Feb. 10), the main question that came up during her confirmation hearing last week was specifically about Reserve Trust Company, a Colorado-based FinTech.
Under the Obama Administration, Raskin was appointed Governor of the Board of the Federal Reserve from 2010 to 2014 before taking on the role of Deputy Secretary of the Treasury from 2014 to 2017.
From there, Raskin joined the board of directors of the Reserve Trust Company, a FinTech in the small town of Greenwood Village, Colorado, that has less than 16,000 residents. Reserve Trust offers payment processing and other business-to-business (B2B) services for payment companies.
See also: Fed Nominee Raskin Faces Grilling From GOP Lawmakers
Reserve Trust says on its website that in 2018 it “became the first state-chartered trust company to obtain a Federal Reserve master account, granting direct access to Federal Reserve clearing, payment, and settlement services.”
Other FinTechs must partner with banks to offer such services as the transfer of funds. Raskin left Reserve Trust in 2019.
Records obtained by the Senate reportedly indicated that Raskin called the regional Fed office while at Reserve Trust regarding a federal contract that the FinTech ultimately received.
Read more: US Chamber of Commerce Questions Past Statements of Fed Nominee Raskin
According to reports, Raskin told the Senate Banking staff on Jan. 28 that had no idea why Reserve Trust wanted the contract and a master account. She also said she had no recollection of making a call on FinTech’s behalf.
Raskin said she would do whatever was necessary to make sure lawmakers were satisfied that she would steer clear of possible conflicts of interest.
Sen. Elizabeth Warren (D-Mass.) asked that Raskin take an extended ethics pledge, the Wall Street Journal reported on Thursday.
“These are the strongest ethics standards ever agreed to by Federal Reserve Board nominees,” Warren said.
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