After the committee vote, the full Senate will vote on controversial nominee Shelton, whose policy stances have raised concern.
At an Executive Session, the Senate Banking Committee voted along party lines, 13 to 12, to approve the nominations of Dr. Judy Shelton and Dr. Christopher Waller to be Federal Reserve Board Governors. The nominations will now go to the full Senate.
Shelton’s controversial road. In July 2019, President Donald Trump announced his intention to nominate Dr. Shelton to become a Fed governor (see Banking and Finance Law Daily, July 3, 2019). At the February 2020 nomination hearing, Shelton’s nomination seemed rocky due to controversy over her policy views. After Shelton’s testimony before the committee, Ranking Member Sherrod Brown (D-Ohio) and others expressed their concerns about her ideological views, which included encouraging a return to the gold standard (see Banking and Finance Law Daily, Feb. 14, 2020).
Brown, along with all other Democratic committee members, on July 10, 2020, signed a joint letter urging Committee Chairman Mike Crapo (R-Idaho) to hold another hearing on Shelton’s nomination before moving her nomination forward. The joint letter contended that another hearing for Shelton was necessary because, from their perspective, Shelton’s prior testimony before the Committee raised "serious concerns" about her ability to "handle an economic crisis, like the one we are currently facing," and the "Congress and the American people need answers" before the Committee votes on her nomination.
Chairman Crapo spoke at the meeting, noting that he received the letter from Democratic committee members "raising concerns over Dr. Shelton." Crapo rebutted criticism that Shelton does not believe in the Fed’s independence, stated that she supports federal deposit insurance, and stated that she would not advocate returning to the gold standard. Brown also spoke at the meeting, emphasizing the importance of the Fed’s independence. Brown stated about Shelton that "our economic crisis would be even worse if she was sitting on the Board today."
Senator Kevin Cramer (R-ND), a Banking Committee member, issued a statement after the vote calling Shelton and Waller "well-qualified nominees ready to step up to the plate and serve our country. The Federal Reserve needs to have all hands on deck as it continues to implement CARES Act programs and help the businesses and nonprofits in need of assistance."
Sen. Catherine Cortez Masto voted ‘no’ on Shelton’s nomination. In a statement she explained that "we need a steady, independent nominee" and expressed her "grave reservations" about Shelton’s ability "to remain independent of the current administration, which the job requires."
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