Five moderate Senate Democrats have informed the White House that they will oppose President Biden’s “radical” nominee, Saule Omarova, to head the Office of the Comptroller of the Currency (OCC), effectively sinking her candidacy to run the nation’s most critical banking industry regulators.
In a phone call Wednesday, Sens. Jon Tester (D-MO), Mark Warner (D-VA), and Kyrsten Sinema (D-AZ), all members of the Senate Banking Committee, told the panel chairman, Sen. Sherrod Brown (D-OH) they would not support Omarova’s nomination, Axios reported.
Other Democrats who are not members of the banking committee — Sens. John Hickenlooper (D-CO) and Mark Kelly (D-AZ) are also opposed to Biden’s nomination. Their opposition is seen to buck the White House on an important nomination, even if it hands Republicans a political — and symbolic victory.
Biden in late September announced his intent to nominate Omarova, a Wall Street critic cheered by progressives, to lead the nation’s top bank regulator. The OCC, a top position of the Treasury Department that oversees the nation’s largest banks, regulates about 1,200 banks with total assets of around $14 trillion, or two-thirds of the entire U.S. banking system. Its representatives work inside the nation’s largest lenders to ensure banks are safe by abiding by federal law, providing fair access to financial services, and otherwise examining bank management.
However, Omarova, a Cornell Law Professor who was raised in the former Soviet republic of Kazakhstan and studied at Moscow State University, has attracted controversy based on her past views. Most notably, Omarova’s scholarly paper, “The People’s Ledger,” where she advocates for ending banking “as we know it” by making private banks “non-depository lenders” and moving Americans’ money to the Federal Reserve.
Republicans have railed against her candidacy since Biden’s announced his intent to nominate Omarova and has gotten fierce pushback for other views, including where she dubbed the financial services industry a “quintessential a–hole industry” full of “systematically a–hole-type behavior.”
Omarova also faced intense pushback by banks themselves, which generally stayed out of confirmation battles. The U.S. Chamber of Commerce sent a letter to the Senate Banking Committee following Biden’s announcement giving a rare strong opposition of Omarova’s nomination. Industry advocates have ramped up pressure for weeks ahead of her appearance before the Senate Banking Committee last week. In remarks at ABA’s Annual Convention in Tampa last month, American Bankers Association President and CEO Rob Nichols called on bank groups to unite against Omarova.
“Dr. Omarova would relegate community banks to ‘pass through’ entities that hold their deposits on behalf of the Federal Reserve, effectively eliminating the community banking model that not only provides the U.S. the most diverse and competitive banking system in the world but also meets the unique and evolving needs of small businesses and consumers in communities across the country,” Nichols said.
Even Biden’s Treasury secretary Janet Yellen, to whom the comptroller reports, was against her nomination, the Wall Street Journal reported in an editorial.
During a fiery hearing last week, Republicans savaged Omarova over her previous academic writings, with Sen. John Kennedy (R-LA) questioning whether he should call the native of the former Soviet Union a “professor” or “comrade.”
Omarova attempted to defend herself in interviews in recent weeks, and during her hearing statement, testimony implicitly pushed back on suggestions that she might be a communist. She said her goal, if confirmed, will be to help small and medium-sized banks compete.
However, those same small and medium-size bank groups are also fighting against her appointment.
The Independent Community Bankers of America, who represents thousands of small banks in virtually every congressional district and is highly influential, sent a letter urging the Senate banking committee to reject Omarova’s nomination. In the letter, the group noted they have rarely weighed in or opposed previous nominations from Biden or past presidents but are “taking this unusual step” with this nomination.
Omarova has also been highly critical of crypto, calling the digital currencies “untethered” from the real economy.
Sen. Pat Toomey (R-PA), ranking member of the Senate banking committee and strong advocate of cryptocurrencies, said that he doesn’t think he’s “ever seen a more radical choice for any regulatory spot in our federal government.”
“There’s a lot that’s extraordinary and radical here—but maybe the heart of it is that Ms. Omarova doesn’t just want tightened regulation of banks,” Toomey added. “She clearly has an aversion to anything like free-market capitalism … in an October 2020 paper called ‘The People’s Ledger,’ she outlined a plan for ‘radically reshaping the basic architecture and dynamics of modern finance.'”
The Biden administration has been warned privately that over a handful of Democratic senators have expressed reservations about Omarova’s nomination prior to and after last week’s tense hearing showdown. Other senators who previously expressed concerns, according to people familiar with the matter who spoke to The Floridian but haven’t stated as of late, whether they oppose Omarova’s nomination are the two Senators from Delaware — Tom Carper and Chris Coons, a state where many financial firms are headquartered.
Tester, a member of the Banking Committee during his line of questioning at Omarova’s nomination hearing, said he had “significant concerns” about her policies and criticized her over previous opposition to a bipartisan regulatory relief he wrote in 2018. He also pressed Omarova about a newly unearthed video comment she made in February during a “Social Wealth Seminar” event hosted by the Jain Family Institute, a nonprofit research organization where she admitted she wants traditional fuel industries “to go bankrupt” to “tackle climate change.”
Sen. Ted Cruz (R-TX) tweeted Omarova is a “grave threat to our economy,” following the video circulation, which has garnished over 1.6 million views. Sen. Marco Rubio (R-FL) also blasted Biden’s nominee, saying a “communist” who supports “communist policies” shouldn’t be the top bank regulator.
Progressives, who are strong supporters of Omarova, such as Sens. Elizabeth Warren (D-MA), criticized Republicans for conducting a “vicious smear campaign,” calling it “red scare tactics.” Both Brown and Warren are pushing Biden not to drop Omarova’s nomination despite the handful of moderates Democrats expressing opposition. Brown attempted to use the race card in citing the strong Republican opposition made during Omarova’s hearing to rally Democrats to become more receptive towards voting for her nomination.
Biden officials are aware of their deep opposition for Omarova and know the five-plus Democrats are making the math to confirm her nearly impossible but still insist on standing by her publicly, saying she “eminently qualified” for the job.
“The White House continues to strongly support her historic nomination,” a White House official told Axios. “Saule Omarova is eminently qualified for this position,” the official said. “She has been treated unfairly since her nomination with unacceptable red-baiting from Republicans like it’s the McCarthy era.”