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Obama nominates Md.’s top financial regulator for Fed

Sarah Bloom Raskin praised for work overseeing banks, mortgage lenders

President Barack Obama nominated Maryland’s top financial regulator and two others to the Federal Reserve System’s Board of Governors Thursday, adding new dimension to the nation’s central bank.

The announcement of Sarah Bloom Raskin’s nomination did not come as a surprise, as her name had been floated as a probable nominee for a couple months. It is believed that Raskin’s experience as counsel to the U.S. Senate Banking Committee would allow the Federal Reserve to expand its expertise on financial regulation, including protections for consumers.

She has worked at the New York Fed and the consultancy Promontory Financial Group.

Obama also nominated Janet Yellen, president of the Federal Reserve Bank of San Francisco, for vice chairwoman of the central bank, and Peter Diamond, an economist and professor at the Massachusetts Institute of Technology, for a seat on the governing board.

In her role as Maryland’s commissioner of financial regulation, Raskin has overseen the regulation of banks, credit unions, debt management companies, collection agencies and mortgage lenders, servicers and originators.

Department of Labor, Licensing and Regulation Secretary Alexander M. Sanchez praised Raskin’s work in a news release,  saying that since she took on the job in 2007 she has led her office in licensing mortgage brokers — a major undertaking — and in working with federal prosecutors to stop foreclosure rescue scams.

Department spokesman Bernie Kohn said the agency would not make Sanchez or Raskin available for comment. “The release will have to speak for itself,” he said.

Raskin won the Maryland Consumer Rights Coalition’s Denis J. Murphy Consumer Advocate of the Year award in 2009.

In an interview with The Daily Record earlier this month, Sanchez said of Raskin, “She has done such an amazing job and that’s why she has the national recognition that she does. With extremely limited resources, she’s gone after these folks as a tremendous consumer advocate.”

Of her potential nomination to the Fed board, he said, “I hope to have to replace her soon.”

“What a huge win that would be for the state, for the department, for the nation,” he added. “I think she would be an ideal person to do it.”

He said a replacement would not be considered until Raskin’s nomination moved forward.

The Maryland Bankers Association, whose institutions are regulated by Raskin, also applauded her  work Thursday. Kathleen Murphy, president and CEO of the association, said Raskin used her industry expertise to improve banking supervision.

“This focus has ensured that bank examiners have the training and expertise needed to evaluate complex institutions during these challenging times,” Murphy said in a written statement.

Raskin received her bachelor’s degree from Amherst College and her law degree from Harvard Law School. A Takoma Park resident, she is married to state Sen. Jamin B. “Jamie” Raskin, D-Montgomery.

As the country’s central bank, the Federal Reserve is guiding the nation out of the worst financial crisis since the 1930s. Its decisions on short-term interest rates and bank regulation, as well as its role as banker of last resort, directly affect the economy and employment.

Obama’s moves come as Congress has just agreed to debate a financial overhaul bill that could significantly change the Fed’s responsibilities, possibly giving it the power to break up complex companies that threaten to cause major damage to the economy.

The Fed nominations are subject to Senate approval. Board members are generally appointed for 14-year terms. However, Raskin will be taking over a former board member’s unexpired term that began in 2002. She could be reappointed to a 14-year term after that.

If the three nominees are approved, all seven Fed governor slots would be full for the first time in four years. Raskin and Diamond, an expert on Social Security, would fill the two vacant seats on the board.

Yellen, who is expected to focus on the nation’s high unemployment levels, would replace vice chairman Donald L. Kohn, who plans to retire in June.

Raskin is among many Maryland officials plucked by the Obama administration, including former DLLR Secretary Thomas E. Perez to serve as assistant attorney general; Transportation Secretary John D. Porcari as deputy secretary of the U.S. Department of Transportation; and Baltimore City Health Commissioner Joshua Sharfstein as deputy commissioner of the Food and Drug Administration.

The Associated Press contributed to this article