Biden's pick for the Fed's top bank regulator withdraws her nomination amid backlash from Manchin and Senate Republicans

• Sarah Bloom Raskin, Biden's top pick for a key Fed role, withdrew her nomination Tuesday.
• Raskin was picked to serve as the next vice chair for supervision and oversee banking regulation.

Sarah Bloom Raskin, the Biden administration's top pick to serve as the next top banking regulator at the Federal Reserve, has withdrawn her nomination for the position.

Raskin sent a letter to President Joe Biden on Tuesday pulling herself out of the confirmation process, The New Yorker reported Tuesday. Biden nominated her to serve as the Fed's next vice chair for supervision in January, teeing Raskin up to serve as one of the financial sector's top regulators.

The months since have seen the Senate GOP fervently oppose her confirmation. Republicans have pointed to Raskin's previous comments around climate policy, arguing she would bring dangerous partisanship to the central bank's governing board.

Raskin said in September that regulators should question how laws can be used "to incentivize a rapid, orderly, and just transition" from fossil fuels and other high-emission investments. Those comments raised fears among Republicans that Raskin would lead the Fed to intervene in lending practices to certain energy companies.

Senate Banking Committee Chair Sherrod Brown confirmed her withdrawal in a Tuesday comment. Brown thanked Raskin for her service in prior public roles and pushed back against Republicans opposing her nomination.

"Sadly, the American people will be denied a thoughtful, experienced public servant who was ready to fight inflation, stand up to Wall Street and corporate special interests, and protect our economy from foreign cyber attacks and climate change," Brown said.

Progressives were extremely critical. "We have just seen a very public demonstration of the power of the oil lobby," Sen. Elizabeth Warren of Massachusetts told reporters. "They have blocked and eminently qualified woman because she has the courage to talk about the risks that climate change pose says to our financial system."

Republicans in the Senate Banking Committee blockaded the confirmation process for weeks by preventing her confirmation from leaving committee and moving to a Senate vote. Yet hopes for an eventual confirmation faded on Monday after Sen. Joe Manchin of West Virginia came out against Raskin's nomination. Raskin "failed to satisfactorily address my concerns," Manchin said, adding it's "imperative" that the Fed avoid "any hint of partisanship."

"The time has come for the Federal Reserve Board to return to its defining principles and dual mandate of controlling inflation by ensuring stable prices and maximum employment," Manchin said in a statement. "I will not support any future nominee that does not respect these critical priorities."

Raskin has served as a governor on the Fed board and as a deputy Treasury secretary. She defended her position on climate change risk analysis in her letter to Biden, noting other central banks around the world have already started looking into such uncertainties.

"It was — and is — my considered view that the perils of climate change must be added to the list of serious risks that the Federal Reserve considers as it works to ensure the stability and resiliency of our economy and financial system," she said in the letter, adding "this is not a novel or radical position."

Raskin's views on climate change aren't the only thing to bring some backlash to her confirmation process. Raskin's husband, Rep. Jamie Raskin of Maryland, violated federal conflict-of-interest law when he failed to disclose Sarah Bloom Raskin's sale of Reserve Trust stock on time. The sale, which netted roughly $1.5 million, has fallen under scrutiny by some watchdog groups that have questioned whether Raskin used her connections at the Fed to aid the fintech company.

Republican Sen. Cynthia Lummis of Wyoming brought the sale up during Raskin's confirmation hearing on February 3, saying it was "my understanding" that Raskin called the Kansas City Fed after Reserve Trust's application for a master account was denied in 2017. Raskin didn't deny whether she called the Fed but maintained her actions didn't violate any ethics rules.

"If you are suggesting anything improper, I want to make very clear that I have first of all had the honor to serve in various public capacities, and each time I left I have been very mindful of the rules regarding departure," Raskin said at the hearing.