WASHINGTON—The U.S. Chamber of Commerce, one of Washington’s largest business groups, is raising concerns about Sarah Bloom Raskin, President Biden’s nominee to become the government’s top banking supervisor, after her calls for regulators to speed up the transition from fossil fuels.
The business lobbying group called on members of the Senate Banking Committee to question Ms. Raskin about her prior statements, which include calls to use financial regulation to address threats posed by climate change. Those positions have been cheered by progressive Democrats but criticized by Republicans.
“Some of Ms. Raskin’s past actions and statements have raised concerns among the U.S. business community and merit the committee’s scrutiny,” said Thursday’s letter, which asks if it is the Federal Reserve’s role “to direct capital away from certain industries that are politically disfavored.”
The letter, which also urged lawmakers to scrutinize Ms. Raskin’s views on other issues such as bank-merger policy, is another sign that she could face a contentious confirmation process. Still, she is unlikely to encounter the kind of industry opposition that helped torpedo the nomination of Saule Omarova, an academic Mr. Biden tapped last year for a separate post overseeing national banks. That fight was led by community banks who have a more favorable view of Ms. Raskin from her former stints in government.
The letter comes a week before Ms. Raskin is scheduled to testify before the Senate banking panel on Feb. 3 along with two economists tapped 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.
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.).
White House spokesman Michael Gwin said Ms. Raskin would bring unprecedented experience to the job and had won the support of economic experts across the political spectrum.
Ms. Raskin is “firmly opposed to the Federal Reserve allocating credit by sector or choking off sectors from access to credit,” a senior administration official said. Ms. Raskin supports an existing policy framework on climate risks that the Fed is already pursuing and will work in conjunction with Fed Chairman Jerome Powell and fellow colleagues at the Fed “to identify and mitigate risks facing our financial system,” the official said.
The Fed last year built out two committees designed to monitor climate-related risks in the biggest banks and in the financial system as a whole. But Mr. Powell has been sensitive to potential political blowback, given the U.S. political divisions over how or whether to address climate change.
“We do think we have a role in climate change,” Mr. Powell said at a November press conference. “We expect [financial institutions]…to understand and be in a position to manage their risks,” including physical risks or so-called transition risks, or the costs associated with moving to a lower-carbon economy.
He pushed back against calls from environmental groups for the Fed to influence the cost of borrowing for certain energy investments. “That’s not a decision for bank regulators or for any agency. That’s a decision for elected representatives,” he said.
With a closely divided Senate, Mr. Biden needs either the support of all Democrats to confirm his nominees, or support from some Republicans to overcome holdouts from his own party.
Moderate Democrats on the Senate Banking panel who may hold the key to Ms. Raskin’s nomination have yet to say whether they will support her. A spokeswoman for Sen. Jon Tester said earlier this week that the Montana senator looks forward to meeting with Ms. Raskin and questioning her at the hearing.
Since leaving government in 2017, 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.
“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 2020 report 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.
Write to Andrew Ackerman at [email protected]
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