U.S. Senator Cynthia Lummis (R-WY) pressed one of President Joe Biden’s nominees for the Federal Reserve Board of Governors over her suspicious conduct in helping Reserve Trust, a non-bank trust company, obtain access to the Federal Reserve’s payment system (“master account”), a privilege exclusively reserved for banks. Reserve Trust was the first, and currently the only, non-bank FinTech company to ever obtain master account access.

Raskin joined the board of Reserve Trust in 2017, and this non-bank was initially denied access to a master account that same year. Raskin made calls on behalf of Reserve Trust to the Federal Reserve, and Reserve Trust’s application for a master account was subsequently approved in 2018.

Raskin was compensated for her position on the Reserve Trust board with stock, which she later sold to one of her coworkers at the Treasury Department, Amias Gerety, for $1.4 million. Gerety now works for QED Investors, which today owns a controlling interest in Reserve Trust.

“Two Wyoming-chartered banks have been trying to obtain Fed master accounts for over a year. A master account is critical for banks to be able to access our Federal payment system. But both remain in limbo, though progress is being made. Yet somehow Reserve Trust – a company that had been denied this same access, doesn’t have a Federal regulator and isn’t even a bank – was granted it after Sarah Bloom Raskin joined its board,”Senator Lummis said. “This seems suspiciously convenient that Reserve Trust managed to secure the only Fed master account for a non-bank FinTech company while she was on the board. This requires further scrutiny from this committee and my colleagues in the Senate.”

Wyoming’s special purpose depository institution charter (SPDI) remains under review by the Federal Reserve. This prompted Sen. Lummis to write an op-ed in the Wall Street Journal demanding answers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s