Yesterday, Sarah Bloom Raskin, who had previously served as a Federal Reserve governor and deputy Treasury secretary during the Obama administration, withdrew her nomination to be the Federal Reserve's vice chair of supervision after Republican senators and Democratic Senator Manchin (W. Va.) stated they would not support her.  

The reason for this lack of support is Raskin's outspoken endorsement of and enthusiasm for using the regulatory tools available at the Federal Reserve to combat climate change.  Specifically, Raskin has argued that federal aid to fossil fuel companies, in the form of Fed-subsidized loans, should be curtailed.  These views proved unpalatable to sufficient members of the Senate to doom her nomination. 

The failure of Raskin's nomination is significant.  First, it indicates that despite the recent and extensive progressive focus on using financial regulatory tools as a means to combat climate change, such tactics are still subject to substantial resistance, and may fail to be implemented.  Second, Raskin's withdrawal may also indicate that the Biden Administration is not willing to wholeheartedly support the use of the Federal Reserve to enact regulations advancing efforts to combat climate change.  (Conversely, this could conceivably be a political quid pro quo for support for a different set of measures--such as the SEC climate disclosures that are expected to be publicized next week.)  Third, this nomination also indicates the role that Senator Manchin--a conservative West Virginia Democrat with extensive ties to the coal industry--plays with respect to the Biden Administration's climate policy (in essence, an effective veto over much of it). 

It remains to be seen whether the Federal Reserve will still generate regulations and policies designed to combat climate even in the absence of Rankin. 

Republicans had held up the nominations over the choice of Raskin — a progressive darling who has called for greater scrutiny of banks’ lending to fossil fuel companies — to be the Fed’s vice chair of supervision, effectively the Fed’s bank watchdog. Raskin withdrew her nomination on Tuesday after Sens. Joe Manchin (D-W.Va.), Susan Collins (R-Me.) and Lisa Murkowski (R-Alaska) said Monday that they would not support her.

But her more recent endorsement of regulators taking a greater role in mitigating the financial risks posed by climate change quickly spurred opposition from Republicans, who contend that the Fed should stick to its narrower mandate of promoting price stability and full employment.

FOOTNOTES

https://www.politico.com/news/2022/03/16/senate-advances-powell-fed-nominees-raskin-00017884