Sarah Bloom Raskin, the nominee for the powerful No. 2 spot in the Treasury Department, sailed through her confirmation hearing last week. She is likely to be one of the first nominees approved in the post-filibuster Senate, though it seems she would get the nod in any case.
Raskin is currently a governor on the Federal Reserve Board, and she spent several years on Capitol Hill on the staff of the Senate Banking Committee. But the role where she made her regulatory chops and got noticed by everyone from Lew to consumer advocate Sen. Elizabeth Warren was as Maryland's commissioner for financial regulation.
As state regulator, by all accounts, she was tough on financial institutions. But as former Maryland senator Paul Sarbanes said in endorsing her at last week's hearing before the Senate Finance Committee, she won praise both from banking associations and consumer groups, showing her ability to "bring people together."
The job of deputy Treasury secretary is an open-ended one, embracing anything the secretary wants, plus frontline responsibility for administering the sprawling bureaucracy.
Lew — who reportedly asked for Raskin as his deputy to replace Neal Wolin, who left in early September — certainly has her experience has a regulator in mind.
"Sarah has a deep understanding of banking and financial regulatory issues," Lew said in a statement when her nomination was announced in July, "as well as a firm grasp of how to run large, complex organizations."
In her prepared remarks for the hearing, Raskin ticked off how she saw the challenge in the new post. "From housing finance reform and implementing financial regulatory reform to tailored sanction design and implementation, new trade agreements and tax and entitlement reform," she said, "we have the chance to make important long-term an! d durable progress for the country."
Lew has expressed his frustration that the myriad bank regulatory agencies have been slow in formulating rules mandated by the Dodd-Frank financial reform, especially the Volcker Rule requiring banks to spin off speculative trading activities. In July, he strongly urged the agencies to complete these rules by the end of the year.
In that same month, Raskin told an audience of graduate business students in Colorado that she had opposed a draft for the Volcker Rule at the Fed because it was too soft.
"I was concerned that, as proposed, the guard rails were too broad and would allow banks to be able to go too far off the road," she said in a speech in Boulder. "Further, I was concerned that the guard rails as crafted could be subject to significant abuse — abuse that would be very hard for even the best supervisors to catch."
Raskin also reportedly opposed the $25 billion settlement with banks on loan servicing and foreclosure abuses in 2012 as too lenient, but the Fed was not the lead agency in negotiating that settlement and her objections did not carry the day.
As a state regulator, Raskin was in the forefront in seeking foreclosure relief for homeowners, striking a deal with mortgage servicing companies in 2008, still early in the crisis.
Raskin spent some time in the private sector between her work on Capitol Hill and her return to public service, much of it, ironically, at Promontory Financial Group, a consulting firm that came under fire earlier this year for charging excessive fees in yet another regulatory action on faulty foreclosure practices.
But she returned to public service in 2007 as a state regulator and now has ascended rapidly to one of the most influential posts in government, with impeccable bona fides as a consumer advocate.
In her testimony last week, Raskin said that for all the economic analyses and data available at the Fed she had learned more than she "ever imagined possible" during her tenure! as gover! nor from impromptu visits to job fairs and unemployment centers.
"Talking to people trying to avoid falling off the economic ledge reminds us of the urgent public purposes that must infuse our work here if we are to be authentically successful," she said. "I make it a continuing commitment to throw everything I have into seeking ways to broaden the opportunities for prosperity for all Americans."
It was a declaration that should have bipartisan appeal. The top Republican on the Senate panel, Orrin Hatch of Utah, in fact said afterwards that Raskin had his vote, making it almost certain that she will be confirmed rapidly and Lew will have a consumer advocate deputy at Treasury.
Darrell Delamaide has reported on business and economics from New York, Paris, Berlin and Washington for Dow Jones news service, Barron's, Institutional Investor and Bloomberg News service, among others. He is the author of four books, including the financial thriller Gold.
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