Raskin Faces Senate Questions Over Climate Views

The U.S. Chamber of Commerce last week urged Senate lawmakers to scrutinize Ms. Raskin’s views on climate and other matters, while 41 oil-and-gas trade groups pressed lawmakers to oppose her, citing her climate stances. “She is a strong advocate for debanking the very industry that powers America,” the energy groups said in a Jan. 28 letter.

Ms. Raskin hasn’t encountered opposition from banks 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 American Bankers Association and the Financial Services Forum, which represents the largest U.S. lenders, issued statements congratulating her on her nomination.

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

Ms. Raskin is set to appear before the Senate Banking Committee 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.

Mr. Biden has also nominated Fed Chairman Jerome Powell for a second term and Fed governor Lael Brainard to become Fed vice chairwoman. If all five of Mr. Biden’s nominees win Senate confirmation, they would hold most of the seats on the seven-member Fed board.

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 confirmation have yet to say whether they will support her. Montana Sen. Jon Tester said Tuesday that he “had a nice meeting with her, and I’ll see how the hearing goes.” He said Ms. Raskin’s nomination had raised “no red flags as of yet.”

Ms. Raskin 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.).

As a central bank observer in recent years, Ms. Raskin has been particularly outspoken about how the Fed should tackle climate-related financial risks, 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.

“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 Capital Markets, a climate advocacy group.

Critics say Ms. Raskin’s calls for regulators to motivate a more rapid transition away from loans to high-emission industries go beyond the scope of the Fed’s authority, since the central bank lacks a mandate to fight climate change and there is political division on the issue in the U.S.

Ms. Raskin would fill a post vacated by Randal Quarles, a Trump pick who supported including climate as one among many risks bank supervisors might consider, but in an interview described Ms. Raskin’s prior statements as extreme.

“Accelerating the transition is just not the Fed’s job, it’s not their political mandate, it’s not supported by the data around the actual risks of climate change to the financial system and it’s just way too controversial,” Mr. Quarles said. “It would be damaging to the institution in the United States at this moment.”

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,” an administration official said. Ms. Raskin supports an existing policy framework on climate risks that the Fed is already pursuing and will work with Mr. Powell and other Fed officials “to identify and mitigate risks facing our financial system,” the official said.

Supporters say Ms. Raskin has the prescience to spot and respond to emerging financial risks, such as when she spearheaded a push to fight cyberattacks targeting banks and other financial institutions during the Obama administration.

She led a push to declassify and share information to better arm firms with information such as on a spate of Iranian “denial of service” attacks. She also pushed firms to more freely share cyber information with one another, said Kathleen Hamm, who served as a counselor to Ms. Raskin at the Treasury Department. Much of that work involved wrangling independent U.S. regulators and then working with overseas counterparts, culminating with a 2016 agreement among the G-7 finance ministers.

Former Treasury Secretary Jacob Lew, who worked with Ms. Raskin at the Treasury Department, praised her ability to collaborate with other policy makers.

“Coordinating in that world is always a challenge, especially on a technical issue like this,” said Mr. Lew, referring to cyber issues. “The ability to deal with complicated issues in a collaborative way through complex structures, that’s very relevant to the Fed.”

—Andrew Duehren contributed to this article.

Write to Andrew Ackerman at [email protected]