Republicans on the Senate Banking Committee are vowing to pursue legislation mandating more transparency from the Federal Reserve after learning the central bank had documents regarding former Fed nominee Sarah Bloom Raskin that the bank never divulged to Congress.
In a letter sent Tuesday to Fed Chair Jerome Powell, 11 GOP members of the committee complained the bank never complied with a February request by ranking Republican Pat Toomey for correspondence about Reserve Trust, a fintech firm that received a Fed master account while Raskin, an ex-Fed governor, served as a company director.
A Fed spokesperson declined to comment.
Bloomberg reported last week the Fed had revealed in a July 29 letter to the American Accountability Foundation, a conservative group that investigates President Biden’s nominees, that it has 12 pages of records relating to Raskin and Reserve Trust’s master account.
“The fact that the Fed has been more responsive to an outside non-profit group than it has to members of the Senate committee that directly oversees it is outrageous,” the Republican senators wrote. “Unfortunately, obstructionism has become too common a response from the Fed and regional Fed banks — which, after all, are creatures of Congress — to congressional oversight inquiries from members in both parties.”
The Fed has declined to release the records, citing multiple exceptions to the Freedom of Information Act.
The Banking Committee Republicans are also unhappy with the refusal of the Federal Reserve Bank of Kansas City to provide information about Reserve Trust’s master account. They said their concern is not just about Raskin’s now-withdrawn nomination as Fed vice chair for supervision, but also overseeing how the Fed grants master accounts and whether it has done so free of favoritism.
“In light of this persistent refusal to comply with reasonable requests for information, we have no choice but to pursue legislation that will compel these public institutions to be more transparent and accountable to Congress,” they wrote.
Toomey has said previously he wants to compel the Fed to answer questions from Congress and has talked about other ideas as well, including subjecting the regional Fed banks to the Freedom of Information Act — they are now exempt — as well as other possible changes, like making regional bank presidents presidential appointments subject to Senate confirmation.
The Fed and the Kansas City Fed declined to comment last week on Toomey’s complaints.