Biden Pick to Lead Major Banking Regulator Drops Out

December 7, 2021 by Dan McCue
Biden Pick to Lead Major Banking Regulator Drops Out
Saule Omarova (Photo courtesy of Senate Committee on Banking, Housing and Urban Affairs)

WASHINGTON — Saule Omarova, a law professor at Cornell University who was President Biden’s pick to be the next head of the Office of the Comptroller of the Currency, has withdrawn her name from consideration after several Republicans accused her of communist sympathies.

In a letter to President Biden, Omarova said it was a “great honor and a true privilege to be nominated” and that she deeply values the president’s trust in her abilities.

“At this point in the process, however, it is no longer tenable for me to continue as a presidential nominee,” she wrote.

Omarova’s withdrawal comes weeks after a heated confirmation hearing before the Senate Banking Committee in which Republican after Republican parsed her writings and her childhood in the former Soviet Union.

Omarova, who is a U.S. citizen and is currently a professor of corporate law and financial regulation at Cornell University, was born in what is now Kazakhstan.

She came to the U.S. as part of an exchange program when she was a student at Moscow State University in 1991. But when the Soviet Union collapsed in December 1991, she was effectively stranded in the United States.

Particularly irksome to her critics are writings in which she has proposed dramatic changes to the U.S. financial system. In one, she suggested the federal government solve the issue of “unbanked” citizens — typically the poor and minorities — by offering every American a bank account through the federal reserve.

Another of her papers espoused creating a regulatory agency to approve or reject new financial products similar to the way the Food and Drug Administration approves and rejects new medicines and vaccines.

The criticism peaked with an editorial penned by The Wall Street Journal’s conservative editorial board entitled “A Banking Regulator Who Hates Banks.”

At one point the editorial noted, “Senate Republicans have asked for a copy of her thesis, ‘Karl Marx’s Economic Analysis and the Theory of Revolution in The Capital.’ She hasn’t complied, and neither has she repudiated her Soviet-era views.”

Later it opined that “opposition to Ms. Omarova is based on her radical views and concern that she’d abuse her supervisory power as Comptroller to expand political control over the private economy. Most financial regulatory agencies are structured as boards or commissions, but the Comptroller can exercise power unilaterally. She would also sit on the Financial Stability Oversight Council — which has sweeping power to regulate ‘systemically important’ risks.

“The Senate should defer to Presidents on most nominees, but not on one who loathes the institutions and system she’d regulate,” the WSJ’s editorial board said.

The Office of the Comptroller of the Currency was established during the Civil War to regulate and supervise banks and ensure equal treatment to all bank customers.

Though it technically is housed within the Treasury Department, it operates as an independent agency.

In a statement released by the White House Tuesday evening, President Biden accepted Omarova’s request to withdraw her name from nomination, and went on to explain he nominated her in the first place “because of her deep expertise in financial regulation and her long-standing, respected career in the private sector, the public sector, and as a leading academic in the field.” 

“She has lived the American dream, escaping her birthplace in the former Soviet Union and immigrating to America, where she went on to serve in the Treasury Department under President George W. Bush and now works as a professor at Cornell Law School,” the president continued.

“As a strong advocate for consumers and a staunch defender of the safety and soundness of our financial system, Saule would have brought invaluable insight and perspective to our important work on behalf of the American people. But unfortunately, from the very beginning of her nomination, Saule was subjected to inappropriate personal attacks that were far beyond the pale.”

Dan can be reached at [email protected] and at https://twitter.com/DanMcCue

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  • Cornell University
  • Office of the Comptroller of the Currency
  • Saule Omarova
  • Senate
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