Sarah Bloom Raskin, nominated to be vice chairman for supervision and a member of the Federal Reserve Board of Governors, speaks during a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill in Washington, D.C., U.S. February 3, 2022.
Bill Clark | Reuters
The Colorado Division of Banking on Tuesday objected to the Federal Reserve Bank of Kansas City’s description of how it came to classify fintech company Reserve Trust as a bank.
The dispute represents another headache for President Joe Biden Fed nominee Sarah Bloom Raskin and Democrats hoping to confirm her to be one of the most powerful bank regulators in the world.
The Colorado agency told CNBC that a statement issued by the Kansas City Fed last week “misrepresented” its role in Reserve Trust’s quest in 2017 to eventually acquire a “master account” at the central bank.
Raskin joined Reserve Trust’s board in May 2017, months after leaving her post as the Treasury Department’s deputy secretary, as it worked to retool its application for a Fed master account. The firm was approved for a master account in 2018. Raskin left Reserve Trust in 2019.
The Colorado regulator disputed a portion of the Kansas City Fed’s statement from Feb. 7 that states that, after its first failed request for access to a master account, Reserve Trust “changed its business model and the Colorado Division of Banking reinterpreted the state’s law in a manner that meant RTC met the definition of a depository...
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