Toomey backs Barr ahead of committee vote

Michael Barr, the White House’s pick for vice chair for supervision for the Federal Reserve Board of Governors, will face a confirmation vote in the Senate Banking Committee today, and his passage is all but assured.

Sen. Pat Toomey, R-Pa., the ranking Republican on the committee, said he would support Barr in a vote this afternoon, likely giving the former Treasury official a clear path to advance to a Senate-wide confirmation vote.

In a statement released Tuesday evening, Toomey called Barr “well qualified” for the position based on his prior work as Assistant Secretary for FInancial Institutions at the Treasury Department. Now an administrator at the University of Michigan, Barr was instrumental in crafting key provisions of the Dodd-Frank Wall Street Reform Act.

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Initially, Toomey was wary of Barr’s track record, particularly his work designing the Consumer Financial Protection Bureau. But ultimately the senator said he was won over by Barr’s commitment to combating inflation as well as his narrow view of the Fed’s regulatory capabilities — a sticking point that sank the Biden administration’s first vice chair for supervision pick, Sarah Bloom Raskin.

“While I disagree with Professor Barr on a number of policy issues, he has pledged to fight the record high inflation that’s hurting American families,” Toomey said in a statement. “He has also publicly acknowledged that the Fed does not have the authority to, nor should it, allocate credit or use its regulatory powers to accelerate the transition to a lower carbon economy.”

Earlier this year, Toomey spearheaded a blockade against Sarah Bloom Raskin, Biden’s initial nominee for the Fed’s chief regulator, because of her involvement in helping Colorado-based Fintech Reserve Trust secure a Fed master Account. Raskin served on the board of Reserve Trust at the time. He and other Republicans refused to vote on any of the five Fed nominees until Raskin, a former Fed governor and deputy secretary of Treasury, adequately answered questions regarding her involvement with Reserve Trust.

Sen. Joe Manchin, D-W.Va., later said he would not support her nomination because of her suggestion that energy companies should be denied access to emergency credit facilities offered by the central bank in the early part of the COVID-19 pandemic. Raskin withdrew her nomination soon after Manchin's remarks.

Toomey also noted that Barr, who testified in front of the Senate Banking Committee last month, had privately expressed support for applying stricter oversight to Fed’s reserve banks throughout the country. Reining in “mission creep” within the regional banks has been a pet project for the senator in recent months. 

“Importantly, in our conversations and in written correspondence, Professor Barr has strongly committed to promote transparency and accountability at the Fed, including the regional Reserve Banks,” Toomey said in his statement. “I look forward to supporting his nomination.”

If Barr is approved by the Senate Banking Committee, he will advance to a confirmation vote by the whole Senate. He has already secured Manchin's support, who said last month that Barr would be a “good addition” to the Fed Board of Governors. 

If confirmed, Barr will serve a four-year term on the Board of Governors. He will set the supervision and regulatory agenda for the central bank.