Diversity – not in the context of race or culture, but in geography and professional experience – may be the hurdles that at least one senator insist be cleared before four Federal Reserve nominees get to take their seats.
In a letter to President Joe Biden (D) dated Tuesday, Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) listed five questions to the president and his advisors to answer before the committee considers the nominations of four nominees (Jerome H. [“Jay”] Powell, nominee for chair; Lael Brainard, nominee for vice chair; Sarah Bloom Raskin, nominee for vice chair for supervision; and Phillip Jefferson, for board member).
Those questions Toomey asked of Biden are:
- Your nominations to the Senate list Jerome Powell and Sarah Bloom Raskin as “of Maryland”; Lael Brainard as “of the District of Columbia”; and Philip Jefferson as “of North Carolina.” All of those locations are within the Fifth District. What District do you believe each of these individuals will represent, and what specific characteristics qualify each of them as being from that District?
- In general, what specific characteristics qualify a nominee as being “from any one Federal Reserve district”?
- In what circumstances can a current board member’s District be changed and how?
- In what circumstances can an individual who previously served on the Federal Reserve Board be nominated to serve from a District other than the District represented in his or her previous service?
- Please describe how you complied with the law’s requirement that you have shown “due regard to a fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country” in selecting nominees to serve on the Federal Reserve Board.
Toomey, in his letter, noted that “Section 10 of the Federal Reserve Act mandates that “[i]n selecting the members of the Board, not more than one of whom shall be selected from any one Federal Reserve district, the President shall have due regard to a fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country.”
Toomey asserted in the letter that “Congress included this requirement to prevent the concentration of the Federal Reserve’s immense economic power within one region of the country. And further, Congress sought to ensure that our country’s diverse economy was well represented.”
UPDATE: News reports indicated later Thursday that the White House has clarified that Raskin will represent the first district (Boston), Brainard will represent the fifth district (Richmond), Jefferson will represent the second district (New York), and Powell the third district (Philadelphia).
The senator’s letter did not challenge the geographic and professional qualification of a fifth Fed nominee: Lisa DeNell Cook, professor of economics and international relations at Michigan State University (in the Fed’s seventh district, Chicago). However, the White House indicated she will represent the sixth district (Atlanta).