GOP senator claims Sarah Bloom Raskin lobbied for fintech firm as KC Fed chief.

• According to Republican Senator Pat Toomey, Sarah Bloom Raskin, President Biden's nominee for the Federal Reserve's banks regulator, contacted Kansas City Fed President Esther George in 2017 to advocate for a fintech company.
• At the time Raskin was a Reserve Trust board member, the firm had been denied special access to the central bank's payments system.
• In 2018, the Kansas City Fed granted Reserve Trust a second account after Raskin intervened on their behalf.
• In a letter to the Kansas City Fed, Toomey stated that Raskin disclosed to him that she made the 2017 call to support Reserve Trust.

In 2017, Sarah Bloom Raskin, President Joe Biden's nominee for the Federal Reserve's banks regulator, contacted Kansas City Fed President Esther George to advocate for a fintech company that had been denied access to the central bank's payments system, as revealed in a new letter from Republican Senator Pat Toomey.

Raskin had recently joined the board of Reserve Trust, a fintech company that, like many others, was hoping for Fed access to a master account.

In 2017, Raskin left her position as the Treasury Department's deputy secretary after spending more than three years as a governor at the Federal Reserve.

In 2018, the Kansas City Fed approved Reserve Trust's second request for an account, despite claims that its decision was not influenced by Raskin's intervention.

In a letter to the Kansas City Fed, Toomey, R-Penn., stated that George disclosed to him that Raskin made a 2017 call to George to advocate for Reserve Trust.

In his letter to George, Toomey stated that on the evening of February 2, 2022, he and his team had a conversation with your staff.

You admitted that Ms. Raskin had personally contacted you regarding Reserve Trust's master account application after it was rejected.

Raskin was grilled by Senate Republicans during her confirmation hearing to become the next Fed vice chair for supervision, replacing Randal Quarles, over a week before Toomey, the ranking member on the Senate Banking Committee, wrote a letter to her.

Raskin was questioned by Sen. Cynthia Lummis, R-Wyo., about whether she had advocated for Reserve Trust.

Raskin repeatedly refused to answer that question at the public hearing.

This week, she wrote to Toomey stating that she had no recollection of reaching out to Reserve Trust to aid in obtaining approval for its master account.

She also informed him that she would have adhered to all applicable ethics rules if she had communicated differently.

Upon her departure from Reserve Trust in 2019, Raskin sold her financial stake for approximately $1.5 million.

The company's largest selling point to potential customers is its exclusive master account, which is prominently featured on its homepage.

ReserveTrust.com is the first fintech trust company to offer Federal Reserve master account services, allowing financial institutions and fintechs to access payments solutions previously only available from correspondent and sponsor banks.

In his letter to George, Toomey accused the Kansas City Fed of "unacceptable continued stonewalling of reasonable requests for information."

The letter states that George has declined to present evidence that the Fed bank's decision to reverse course on the company's request was not influenced by Raskin's lobbying, but rather due to a change in Reserve Trust's business model and another factor.

The Kansas City Fed approved Reserve Trust's master account application after the company modified its business model and the Colorado Division of Banking reinterpreted the state's law, enabling Reserve Trust to be classified as a depository institution.

The Kansas City Fed typically communicates with a company's management, including directors, when making a decision.

According to Toomey's letter, George claimed that he had never received a call from a former Fed Governor on behalf of an organization seeking a decision from the Kansas City Fed.

Toomey remarked, "That's quite a statement given you've been an official at the Kansas City Fed for forty years and have spent the last decade as its President."

"Although the Kansas City Fed has stated that it acted ethically and reasonably, I am still perplexed as to why it is refusing to cooperate with a legitimate congressional investigation," Toomey stated.

In a separate letter to Federal Reserve Chairman Jerome Powell, whom Biden has nominated to a second term in the role, Toomey wrote that Fed staff had stated they would not respond to a question regarding Raskin's alleged communication with the Fed regarding Reserve Trust.

Whether Ms. Raskin communicated with anyone at the Fed on behalf of Reserve Trust is a simple yet crucial question we posed to the Fed, but they informed us in a February 8, 2022 phone call that they would not respond to this inquiry.

Michael Gwin, the White House spokesman, stated that Sarah Bloom Raskin has pledged to adhere to the most stringent ethical standards in the history of Federal Reserve Board nominees in response to inquiries about Toomey's letters.

Gwin stated in an email that Senator Toomey has been running a baseless smear campaign against a highly qualified nominee for weeks without providing any evidence to support his false accusations. The Kansas City Federal Reserve Bank has already refuted his allegations.

Norm Eisen, who served as the White House special counsel for ethics and government reform during the administration of President Barack Obama, also provided a statement from Gwin.

"Based on what we know, I don't believe the contact with the KC Fed breached any ethics rules," Eisen stated.

The hypocrisy of some complainers who let go of conduct in the previous Trump administration that violated ethics rules is truly astonishing.

A spokesman for the Kansas City Fed declined to comment Friday.

After Lummis accused Biden's candidate during their confirmation hearing, the White House refuted the allegations.

The White House informed CNBC on Feb. 3 that Sarah Bloom Raskin has consistently prioritized her ethical responsibilities while in public service.

The White House stated that Senator Lummis used innuendo without providing any facts to support her false claims.

Senator Lummis lacked evidence to support her innuendo and failed to present it during the hearing.

At the time Raskin called, she was a recently retired top government official.

Lummis did not assert that Raskin's actions were unlawful, but instead characterized them as part of the "revolving door" relationship between politics and corporate interests.

The "revolving door" model proposes that ex-government officials will leverage their connections and influence in government to advocate for corporate interests in exchange for compensation.

On Wednesday, Raskin and two other nominees for Fed governor posts, Lisa Cook and Philip Jefferson, agreed to forgo any employment or compensation from a financial services company after leaving the Federal Reserve, even if they are confirmed.