Bank Lobbyists, Red Baiters Tank Biden Pick For Financial Regulator

Saule Omarova pulled her nomination after a Wall Street lobbying campaign morphed into McCarthyism in the Senate.
WASHINGTON, DC - NOVEMBER 18: Dr. Saule Omarova speaks during her nomination hearing to be the Comptroller of the Currency with the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill on November 18, ... WASHINGTON, DC - NOVEMBER 18: Dr. Saule Omarova speaks during her nomination hearing to be the Comptroller of the Currency with the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill on November 18, 2021 in Washington, DC. Senators questioned Omarova about her views and past comments on bank oversight. (Photo by Anna Moneymaker/Getty Images) MORE LESS

Thirteen years after the financial crisis that nearly toppled the country’s economy and pounded shockwaves into American politics, a bipartisan group of senators managed to tank President Biden’s choice for a top financial services industry regulator, as lobbyists for the sector goaded them to do so.

Saule Omarova, a professor at Cornell Law School, withdrew her nomination for head of the Office of Comptroller of the Currency on Tuesday.

Before Biden nominated her to serve as one of the country’s main financial regulators in September, Omarova had cut a profile for herself as a detailed and precise critic of the country’s biggest banks and financial services sector. She also was an advocate for reforms of the sector, including an October 2020 proposal to allow Americans to store their savings in bank accounts at the federal reserve.

As comptroller of the currency, Omarova would have broad regulatory authority over large banks. Her office would have had the authority to charter them, inspect them, and to levy fines and restrict the activities of banks where supervisors find egregious deficiencies.

The prospect of Omarova taking the helm of this job inspired the ire from bank lobbyists.

“We have serious concerns about her ideas for fundamentally restructuring the nation’s banking system which remains the most diverse and competitive in the world,” American Bankers Association President Rob Nichols said in a statement issued shortly after Omarova’s nomination. Nichols also also seemed to cast the fed bank account proposal as “nationaliz[ing] retail banking.”

The Consumer Bankers Association similarly told Politico that Omarova’s statements “raise serious concerns about how she would oversee the well-regulated, well-supervised banking system, protect consumers and work with an industry critical to financing the American Dream for families and small businesses.”

Sen. Pat Toomey (R-PA) played the same tune, saying that Omarova had called for “nationalizing retail banking” and that she had “advocated for ‘effectively end[ing] banking as we know it.’”

Toomey, however, took things in a different direction in his vetting of the candidate: demanding a copy of Omarova’s undergraduate thesis from Moscow State University, where she was a Lenin scholar.

Of course, Omarova’s Soviet background provided great chum for Republicans, but, the New York Times reported, it was lobbyists for the banks who boosted concerns that Omarova’s Soviet upbringing somehow rendered her ineligible.

This all came to a head at her November confirmation hearing, where Sen. John Kennedy (R-LA) asked Omarova if she had “resigned from the young communists” and said that he didn’t know whether to call her “comrade” or “professor.”

For an alleged “comrade,” Omarova must stick out at singings of the Internationale. She would have the rare distinction of being a Communist who also served the George W. Bush administration, and one who cut her teeth as an attorney at white collar defense law firm Davis & Polk.

Omarova grew up in Soviet Kazakhstan, a region that suffered a horrific famine under Stalin in the 1930s.

“I could not choose where I was born,” Omarova remarked at the hearing. “My family suffered under the communist regime. I grew up without knowing half of my family.”

After all that, however, it wasn’t Republicans alone that delivered the death blow to Omarova’s candidacy.

With their 50-seat majority, five Senate Democrats reportedly told the White House and Senate Banking Committee chair Sen. Sherrod Brown (D-OH) last month that they were opposed to Omarova’s candidacy.

This group, according to Axios, included Sens. Jon Tester (D-MT), Mark Warner (D-VA), Kyrsten Sinema (D-AZ), John Hickenlooper (D-CO) and Mark Kelly (D-AZ).

Omarova informed the White House on Tuesday that she was withdrawing her candidacy.

Dear Reader,

When we asked recently what makes TPM different from other outlets, readers cited factors like honesty, curiosity, transparency, and our vibrant community. They also pointed to our ability to report on important stories and trends long before they are picked up by mainstream outlets; our ability to contextualize information within the arc of history; and our focus on the real-world consequences of the news.

Our unique approach to reporting and presenting the news, however, wouldn’t be possible without our readers’ support. That’s not just marketing speak, it’s true: our work would literally not be possible without readers deciding to become members. Not only does member support account for more than 80% of TPM’s revenue, our members have helped us build an engaged and informed community. Many of our best stories were born from reader tips and valuable member feedback.

We do what other news outlets can’t or won’t do because our members’ support gives us real independence.

If you enjoy reading TPM and value what we do, become a member today.

Latest News
Comments
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Associate Editor:
Investigations Desk:
Reporters:
Newswriters:
Director of Audience:
Editor at Large:
General Counsel:
Publisher:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: