Biden's pick to be the Fed's top bank regulator has withdrawn her nomination. She attracted Republican opposition after calling on bank regulators to monitor the financial risks from climate change.



President Biden's embattled pick for a top chair (ph) with the Federal Reserve has withdrawn. Sarah Bloom Raskin had faced stiff opposition from Senate Republicans over her views on climate change. Her chance for winning Senate confirmation was effectively doomed on Monday, when Democratic Senator Joe Manchin of West Virginia said that he would vote against her.

NPR's Scott Horsley joins us now. Hey, Scott.


SUMMERS: So Scott, what exactly was it that made Sarah Bloom Raskin such a lightning rod?

HORSLEY: In a statement this afternoon, President Biden said Raskin had been the target of, quote, "baseless attacks from industry and conservative interest groups." Raskin has been outspoken in arguing that financial regulators should pay more attention to the financial risks posed by climate change, which, by the way, is something the Fed is already doing.

But President Biden wanted to make Raskin the Fed's top bank regulator, and senators from energy-rich states worried that might discourage banks from lending money to fossil fuel companies. Now, Raskin insisted during her confirmation hearing that it would be up to banks to decide who to lend money to. But the fossil fuel lobby wields a lot of power, especially right now when Americans are paying more than $4 a gallon for gasoline.

So for weeks, Republican senators had kept Raskin's nomination bottled up in committee by boycotting a vote. And when Democratic Senator Manchin of West Virginia came out against her on Monday, that was the end of the line.

SUMMERS: And as I understand, there had also been some questions about her work on behalf of a financial technology company located in Colorado.

HORSLEY: That's right. Raskin had previously served on the Fed board and at the Treasury Department. But after she left government, she worked on the board of a company called Reserve Trust in Colorado. That company had applied for a Fed master account, which means access to the central bank's payment system. At first, it was denied, but then later its application was granted, and Republican senators wanted to know if Raskin had improperly used her government contacts to win preferential treatment for the company. Raskin denied that, but it was one more cloud that opponents could use to stall and, ultimately, sink her nomination.

In her letter to the president this afternoon, Raskin wrote that she wasn't concerned about attacks on her character, but she did worry about the effect this would have on, quote, "the willingness of competent and devoted people to serve in government."

SUMMERS: Now, I know this fight has been getting a lot of attention in Washington, but there are also several other Fed nominations that have been stalled. What happens with those now?

HORSLEY: That's right. In boycotting a vote on Raskin's nomination, Republicans had effectively bottled up four other Fed nominations as well, including Jerome Powell's nomination to a second term as Fed chairman. Right now, he's serving in an acting capacity. Republicans insist they are ready to move forward with the other four, so presumably, those will now get voted on in committee.

Committee Chairman Sherrod Brown says he'll schedule a vote soon. Brown also defended Raskin's qualification, and he accused committee Republicans of falling for what he called talking points written by the oil and gas industry.

SUMMERS: OK, Scott, and as I understand, this also comes at a sensitive moment for the Fed, right?

HORSLEY: Well, that's right. The Fed is meeting today and tomorrow, and it's about to raise interest rates for the first time in more than three years as it tries to get control over inflation. Now, this fight over Raskin and the delay in filling the other board seats hasn't really affected that. The rate-setting committee is still going about its business. Powell's in the driver's seat as usual. We expect the Fed to start slowly raising interest rates by one-quarter of 1% and that additional rate hikes will follow in the months to come as the Fed tries to crack down on consumer prices, which were up 7.9% last month, the sharpest increase since 1982.

SUMMERS: All right - NPR's Scott Horsley. Thank you, Scott.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.