Fed Pick Raskin Faces Some Heat in Confirmation

“She’s outstanding and she understands the role of the Fed governors,” said Cam Fine, the former head of the Independent Community Bankers of America, a trade group. “She’s a tough regulator, don’t get me wrong, but she’s very fair.”

Rob Nichols, president and chief executive officer of the American Bankers Association, which also opposed Ms. Omarova, congratulated Ms. Raskin on her nomination. He said he looked forward to learning more about her views during the confirmation  process.

At least one top Republican, Pennsylvania Sen. Pat Toomey, quickly raised concerns over her nomination. Ms. Raskin “has specifically called for the Fed to pressure banks to choke off credit to traditional energy companies and to exclude those employers from any Fed emergency lending facilities,” he said in a statement.

Ms. Raskin didn’t immediately respond to a request for comment. In a statement, Mr. Biden said she “is among the most qualified nominees ever” for the Fed position.

If confirmed by the Senate, Ms. Raskin would become the central bank’s vice chairwoman of supervision, the government’s most influential overseer of the U.S. banking system. She previously served as a Fed governor and as a top Treasury Department official during the Obama administration. Before that, she served as Maryland’s state commissioner of financial regulation. She currently is a law professor at Duke University and is married to Rep. Jamie Raskin (D., Md.).

Mr. Biden formally nominated Ms. Raskin on Friday, along with two economists for other Fed board seats: Lisa Cook, a professor of economics and international relations at Michigan State University; and Philip Jefferson, a professor and administrator at Davidson College in North Carolina.

Friday’s nominations were welcomed by progressive groups and Democratic lawmakers, some of whom have called for the Fed to take a tougher stance in regulating big banks and a bolder approach in addressing financial risks posed by climate change.

“With these nominees, President Biden is showing the country what a Federal Reserve standing on the side of workers and their local communities looks like,” Ohio Sen. Sherrod Brown, a Democrat who chairs the Senate Banking Committee, said in a statement.

With a closely divided Senate, Mr. Biden needs either universal support of Democrats to confirm his nominees or support from some Republicans to overcome holdouts from his own party.

Moderate Democrats on Mr. Brown’s panel who hold the key to Ms. Raskin’s nomination—and who helped stop Ms. Omarova’s—didn’t immediately comment on the new Fed nominees. A spokeswoman for Sen. Jon Tester said the Montana lawmaker “looks forward to reviewing their nominations.” A spokeswoman for Virginia Sen. Mark Warner and a spokesman for Arizona Sen. Kyrsten Sinema didn’t immediately respond to requests for comment.

Since leaving government, Ms. Raskin has spoken out on the need for the Fed and other federal financial regulators to more proactively address growing threats from climate-related events such as natural disasters and wildfires. Those views could attract opposition from Republicans.

“There is opportunity in pre-emptive, early and bold actions by federal economic policy makers looking to avoid catastrophe,” Ms. Raskin wrote in the foreword of a report last year from the Ceres Accelerator for Sustainable Markets, a climate advocacy group.

In a New York Times opinion article in May 2020, Ms. Raskin was critical of broad-based emergency-lending backstops enacted by the Treasury and the Fed to assist businesses during the pandemic, because she believed they should have taken steps to prevent lending to oil-and-gas concerns.

Mr. Toomey, the ranking Republican on the Senate banking panel, said he is concerned that Ms. Raskin “would abuse the Fed’s narrow statutory mandates on monetary policy and banking supervision to have the central bank actively engaged in capital allocation.”

“Such actions not only threaten both the Fed’s independence and effectiveness, but would also weaken economic growth,” he said in a statement.

A White House official said Ms. Raskin would be tasked with looking out for risks to the financial sector and the economy, including risks from climate change. The official said she would prioritize the central bank’s independence and “is not interested in expanding the mandate of the Fed.”

Analysts said Ms. Raskin may be the toughest of the Fed nominations to win confirmation, given the significance of the position and the politics of climate change. Another factor that could complicate her path through the Senate: Republican animosity over the way Democratic policy makers recently dislodged Jelena McWilliams, the Republican head of the Federal Deposit Insurance Corp.

“The FDIC soap opera impacts the overall climate and gives Republicans another talking point when outlining their concerns with Raskin,” said Isaac Boltansky, a policy analyst at brokerage firm BTIG. While the FDIC matter is a peripheral issue, he said, its impact on the overall confirmation climate “makes an already tough nomination fight just a tad tougher.”

Supporters of the nomination played down the prospects that Ms. Raskin would adopt an overtly political approach at the Fed.

“Her life has been in finance and bank supervision, including working in banks, not in politics really,” said Eugene Ludwig, a former comptroller of the currency for whom Ms. Raskin worked in the early 2000s, at Promontory Financial Group, a consulting firm he founded. “Importantly, she’s a moderate. That’s my experience with her.”

If confirmed, Ms. Raskin and the other two nominees would complete Mr. Biden’s remake of the Fed board, following his decision in November to offer a second term to Fed Chairman Jerome Powell and elevate Fed governor Lael Brainard to become Fed vice chairwoman.

Write to Andrew Ackerman at [email protected]