Toomey Raises Concerns Over Fed Nominees’ Lack of Geographical and Professional Diversity
Calls Out Raskin’s “Demonstrated Hostility” to Energy Sector
Washington, D.C. – U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) is raising concerns over the lack of diversity in geography and professional experience in President Biden’s recent slate of nominees to serve on the Board of Governors of the Federal Reserve System.
Section 10 of the Federal Reserve Act mandates that “[i]n selecting the members of the Board, not more than one of whom shall be selected from any one Federal Reserve district, the President shall have due regard to a fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country.”
President
Biden’s Fed nominees Jerome Powell, Lael Brainard, Sarah Bloom Raskin, and
Philip Jefferson have all been nominated from locations within the Fed’s Fifth
District.
In
a letter
to President Biden, Ranking Member Toomey wrote:
“Congress
included this requirement to prevent the concentration of the Federal Reserve’s
immense economic power within one region of the country. And further, Congress
sought to ensure that our country’s diverse economy was well represented.”
“The
legislative history of the Federal Reserve Act bolsters this interpretation. The
author of the geographic diversity requirement explained the important
rationale for having geographically diverse board members: ‘[T]hey must
represent every section of this country. This board, if selected east of
Washington, would know little and care less about the agricultural and other
interests in the Western and Southern States.’ This concern is equally valid
today, though one might replace the phrase ‘east of Washington’ with ‘inside
the beltway.’ If the current slate were to be confirmed, a majority of board
members would hail from the Fifth District (Richmond), with three residing in
the Washington, D.C. metropolitan area, and a majority would be professors from
academia.”
Senator
Toomey also pointed out the Fed nominees’ lack of “fair representation” with
regard to America’s diverse economy, particularly with no board member having
experience in the U.S. energy sector. This is especially concerning as
President Biden’s nominee for Vice Chair for Supervision, Sarah Bloom Raskin,
has a documented
history of hostility towards oil and gas companies.
“While
a lack of expertise at the Federal Reserve Board in any particular industry is
inevitable, the demonstrated hostility of one nominee, Sarah Bloom Raskin,
towards a sector that supports employment for millions of Americans, is
unacceptable,” Senator
Toomey wrote. “In May 2020, Ms. Raskin called
the country’s traditional energy sector ‘a dying industry’ and insisted the
Federal Reserve should specifically preclude fossil fuel companies from
accessing its emergency broad-based lending facilities, which were established
to help restore liquidity to businesses and save jobs when credit markets froze
during the COVID pandemic. She has also advocated for the Federal Reserve to pressure banks into
choking off credit to traditional energy companies.”
To read Ranking Member Toomey’s full
letter to President Biden, click
here.
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