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Key Democrat says he will support Sarah Bloom Raskin for top banking regulator

Sen. Jon Tester, a Democrat from Montana, said Monday that he will support Sarah Bloom Raskin, President Joe Biden’s pick for the Federal Reserve’s vice chair for supervision job.

As a moderate Democrat in a Senate split 50-50 between parties, Tester’s support points to a strong likelihood that the full Senate will confirm Raskin as a top regulator over the banking industry.

Raskin is a former Fed governor (confirmed by the Senate in 2010) who also served at the U.S. Treasury during the Obama administration.

“It is my expectation that she will be confirmed by the full Senate,” Tester told Yahoo Finance on Monday.

His approval comes days after he aired concerns over Raskin’s involvement in clearing a regulatory hurdle for Reserve Trust, a fintech company that Raskin worked with as a board member from 2017 to 2019.

In 2016 the fintech company failed to obtain a “master account” for the company from the Federal Reserve Bank of Kansas City. In 2018, that decision was reviewed and the Kansas City Fed granted Reserve Trust an account, which allows access to the Fed’s payment systems and enables the firm to transact with other firms using central bank money.

In Raskin’s confirmation hearing earlier in the month, Republicans raised questions over whether or not she had leveraged her connections at the Fed to get the master account. The Kansas City Fed clarified that the master account was granted after Reserve Trust altered its business model and the Colorado Division of Banking reinterpreted a state law relevant to the matter.

Tester told Yahoo Finance he had looked into the matter.

“I don’t think there’s a lot there,” Tester said. “I think it’s the way business is usually done or always done in regard to the Fed and private businesses and boards.”

Next steps

Tester and his colleagues on the Senate Banking Committee will be voting on Raskin’s nomination on Tuesday afternoon, alongside nominations for four other Fed spots (Jerome Powell for a second term as Fed chair, Lael Brainard for Fed vice chair, and Lisa Cook and Philip Jefferson for Fed governors).

WASHINGTON, DC - FEBRUARY 03:  Sarah Bloom Raskin, nominee to be vice chairman for supervision and a member of the Federal Reserve Board of Governors, speaks before a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill on February 3, 2022 in Washington, DC. (Photo by Ken Cedeno-Pool/Getty Images)
WASHINGTON, DC - FEBRUARY 03: Sarah Bloom Raskin, nominee to be vice chairman for supervision and a member of the Federal Reserve Board of Governors, speaks before a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill on February 3, 2022 in Washington, DC. (Photo by Ken Cedeno-Pool/Getty Images)

The Montana Democrat said he will support all five nominees, but hopes his colleagues will particularly follow him in supporting Raskin.

“I think ultimately they’ll come to the same conclusion I did, that she is fit to be on the Fed and will do a good job,” Tester said. “And that’s why I’m going to support her, hopefully they do too.”

If the nominees clear the committee Tuesday afternoon, the final step to confirmation would be a full Senate vote to be scheduled after the fact.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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