February 11, 2022

Toomey Blasts Fed and Kansas City Fed for Stonewalling Congress

Reveals New Details About Raskin Lobbying KC Fed President on Reserve Trust

Washington, D.C. – U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) today said that the Kansas City Fed and the Federal Reserve Board of Governors (Fed) are preventing the Senate from obtaining information directly relevant to congressional oversight and its constitutional responsibility to provide advice and consent on a presidential nomination.

The Kansas City Fed has repeatedly stonewalled Ranking Member Toomey’s requests for specific information about the Kansas City Fed’s unusual approval of Reserve Trust’s application for a valuable Fed master account and former Fed Governor Sarah Bloom Raskin’s involvement in it.

In a letter to the Kansas City Fed, Ranking Member Toomey reveals that Kansas City Fed President Esther George has disclosed that Ms. Raskin had indeed personally called her in August 2017 about Reserve Trust’s master account application after it had been denied. Ms. George also disclosed that she informed her staff of the call.

“While it may be routine for your average company director to call a regional Fed bank, there is nothing routine about a former Fed Governor, like Ms. Raskin, calling the president of a regional Fed bank, with whom she previously served on the Fed’s Federal Open Markets Committee, about such a decision,” Ranking Member Toomey wrote. “You indicated that to me yourself. You said you are not aware of ever receiving a call from a former Fed Governor on behalf of an organization seeking a decision from the Kansas City Fed. That’s saying something since you have been an official at the Kansas City Fed for forty years, spending the last decade as the bank’s President.”

As Ranking Member Toomey points out in the letter, the Kansas City Fed is refusing to turn over documents and information, let alone answer questions from the Committee, that would corroborate its February 7th statement claiming the decision to reverse its denial of Reserve Trust’s application was because “[Reserve Trust had] changed its business model and the Colorado Division of Banking reinterpreted the state’s law.” 

Ranking Member Toomey also sent a letter today to Fed Chairman Jerome Powell after the Fed refused to answer whether Ms. Raskin had communicated with anyone at the Fed on behalf of Reserve Trust. In a phone call on February 8, 2022, Fed staff notified Committee staff that the Fed does not intend to answer this question.

“If Ms. Raskin had been lobbying Congress on behalf of Reserve Trust she would have had to disclose that fact publicly,” Senator Toomey wrote. “But in the Fed’s upside-down world, a former Fed Governor can lobby the Fed on behalf of a particular business, concerning an issue that will financially benefit her and the business, and the public has no right to know—even if that Fed Governor is being considered by the Senate for a nearly ten year term as one of the nation’s most powerful financial regulators. This entire episode raises questions not only about Ms. Raskin’s behavior but also about the fairness, transparency, and consistency of the Federal Reserve System’s approach to master account applications.”

In a separate letter to Reserve Trust, Senator Toomey requested answers to a number of questions regarding Ms. Raskin’s work and compensation.


·         For seven years, Ms. Raskin served in the Obama administration, first as a Fed governor and then as the Deputy Secretary of the Treasury. While there, she signed an Obama administration ethics pledge to prevent “Revolving Door” lobbying.

·         In May 2017, four months after leaving Treasury, Ms. Raskin joined the Board of Directors of the Reserve Trust Company (Reserve Trust), a non-depository startup fintech in Colorado.

·         After the company’s application was denied in 2017, Ms. Raskin called, in August 2017, Kansas City Fed President Esther George—with whom she had served on the Fed’s Federal Open Market Committee—on behalf of Reserve Trust.

·         As Reserve Trust’s website boasts, in 2018, “Reserve Trust became the first state chartered trust company to obtain a Federal Reserve master account, granting direct access to Federal Reserve clearing, payment, and settlement services.”

·         In 2020, Ms. Raskin received nearly $1.5 million by selling her shares in Reserve Trust to QED Investors, a firm co-managed by Amias Gerety, who was one of Raskin’s subordinates at Treasury.

·         On a call with Banking Committee staff on January 28th, Ms. Raskin said she did not know why Reserve Trust wanted a master account.

·         During the same January 28th call with Banking Committee staff, Ms. Raskin tried to avoid answering whether she communicated with the Kansas City Fed or the Fed about Reserve Trust and ultimately said that she did not remember if she had.

·         Ms. Raskin also refused to answer whether she contacted the Fed or Kansas City Fed on behalf of Reserve Trust when asked by Senator Cynthia Lummis (R-Wyo.) three separate times during her nomination hearing before the Senate Banking Committee on February 3rd.

·        In questions for the record, Ranking Member Toomey asked Ms. Raskin to turn over documents and to answer a series of detailed questions regarding her work for Reserve Trust, including what actions she took to help Reserve Trust obtain a Fed master account and any communications between Ms. Raskin and the Kansas City Fed or the Fed regarding Reserve Trust’s application.

·        In Ms. Raskin’s written responses to Ranking Member Toomey’s questions for the record, Ms. Raskin provided a blanket “I do not recall” or “I am not aware” in response to more than 35 questions.

·        On February 1st, Ranking Member Toomey sent a letter to the Kansas City Fed requesting information pertaining to its approval of Reserve Trust’s application for a Fed master account.