Key Democrat worries about choice of Biden bank cop, reporting issues

Omarova, a professor at Cornell Law School, is one of many progressive-backed candidates Biden has approached to become regulators, including heads of the SEC, FTC and the Consumer Financial Protection Bureau. But his appointment has been the target of particularly scathing attacks on his view that the government should play a larger role in the financial system, including rare opposition from the US Chamber of Commerce, which generally remains out of the battles of confirmation.

Dr. Omarova would relegate community banks to “transfer” entities that hold their deposits on behalf of the Federal Reserve, thereby eliminating the community banking model that not only provides the United States with the most diverse and competitive banking system in the world. world, but also responds to the unique and changing needs of small businesses and consumers in communities across the country, ”American Bankers Association President Rob Nichols said in a speech this week.

Omarova would not have the capacity, legally or practically, to set up accounts receivable at the central bank, which is an agency entirely separate from the Office of the Comptroller of the Currency. But it would bring to work a deep skepticism of the country’s mega-banks and their role as dominant players in financial markets. She suggested that the current regulatory framework is changing too slowly to properly monitor these companies.

She also suggested that fintech and cryptocurrency advocates – often portrayed as the wave of the future of finance – have overestimated the benefits of these developments for consumers.

The OCC, which has at times been accused of being too comfortable with the banks it oversees, is responsible for overseeing national banks. The next monitor would consider how to reduce the number of people excluded from the financial system and how to regulate the national banking system in an era of technological upheaval, with traditional lenders facing both competition and business opportunities from online and app lenders. financial.

Omarova received strong support from Senate Banking President Sherrod Brown (D-Ohio), while Sen. Chris Van Hollen (D-Md.) Told reporters he was “very supportive” of her. . Senator Mark Warner (D-Va.), Another moderate on the banking panel, gave no inclination as to her position: “I did not have the opportunity to meet her,” he said in an interview.

But the nomination process has become increasingly tense when it comes to its ideology.

Sen. Pat Toomey of Pennsylvania, the top Republican on the Banking Committee, urged Omarova, who grew up in the then Soviet state of Kazakhstan, to publish her undergraduate thesis on Karl Marx. Toomey said in a Senate speech earlier this month that he did not think he had seen “a more drastic choice for any regulatory post in our federal government.”

“Where would a person even have these ideas?” How come it even occurs to someone’s mind to think about these things? ” he said. “Perhaps a contributing factor could be if a person grew up in the former Soviet Union and went to Moscow State University and received a VI Lenin University scholarship.”

Her supporters, including Brown, have criticized the move as an unfair effort to paint her as a communist, while Omarova herself has recently suggested that some of the resistance against her may be motivated by racism. If confirmed, she would be the first permanent controller who is not a white man.

“I am an easy target: an immigrant, a woman, a minority”, Omarova told the Financial Times Last week. She also said that there was “no academic freedom” in the USSR, adding that her thesis was “a compulsory assigned subject”.

Asked by the FT if she thought some of the criticism of her was racist, Omarova said: “I think it’s true.”

In the same interview, she said that her grandmother was orphaned by the government of Soviet leader Joseph Stalin, who “sent her whole family to Siberia and they died there”.

“Her family was destroyed because they were educated Kazakhs who did not join the party,” she added.

Toomey dismissed the idea that Omarova’s background was a factor in his opposition to her.

“This fact of her track record has no bearing on my judgment on the depth of the policies she has advocated and it is perfectly appropriate that we look at those policies,” he said at a recent hearing.