U.S. Senator Pat Toomey wants answers on why the Federal Reserve Bank of Kansas City, he says, revoked a master account for the FinTech Reserve Trust, Reuters wrote on Thursday (June 9).
The master account gives Colorado-based Reserve Trust access to Fed payment services, which Reuters says is a rare and sought-after privilege for a FinTech.
Toomey, R-Pa., writing to Kansas City Fed President Esther George, said she learned unspecified that the account had been revoked.
Toomey, according to the report, said this raises questions about the Fed’s approval process for key accounts. Some FinTech and crypto companies have sought to access these services, usually reserved for traditional banks.
See also: Federal Reserve proposes changes to US central bank payments system
The Fed reportedly considered redoing the application process. In March, he said he was considering a tiered review process, with more scrutiny of federally insured institutions and more scrutiny of uninsured businesses and businesses not under the supervision of banking regulators. .
Reserve Trust’s request was denied in 2017, although it was granted in 2018 after the Fed said the company had changed its business model. The decision was mired in controversy, however, as former Fed Governor Sarah Bloom Raskin, who served on the Reserve Trust board, allegedly personally called George about the company’s candidacy in 2017. , according to Toomey.
Raskin, when she was recently being considered for another Fed job under President Joe Biden, said she acted ethically in the matter.
See also: Sarah Bloom Raskin steps down as Biden’s pick for top Fed banking regulator
PYMNTS wrote about the controversy surrounding Raskin and Reserve Trust. Raskin ultimately withdrew from consideration for Fed chief because too many lawmakers refused to back her, especially Democratic Sen. Joe Manchin, who said he couldn’t back her on her views. on climate change.
Biden’s next nominee, Michael Barr, appears to be closing in on approval. Barr, a law professor, received no opposition from Democrats in a committee vote this week and got five Republican support votes.
See also: Senate panel approves Michael Barr as Fed bank regulator