Senate Hearing for Saule Omarova as Comptroller of the Currency Shows Challenging Path to Approval

 

Saule Omarova testified in front of the Senate Banking Committee today and the challenging questions did not just come from Republican members as several Democrats queried the aspiring bank regulator with difficult queries as well.

Omarova, a Cornell Law professor born in the former Soviet Union, was nominated by President Biden to become the Comptroller of the Currency this past September. The Office of the Comptroller of the Currency is an important financial regulator as it approves and oversees national banks. As was previously reported, Wall Street – as well as the community banking community – had lobbied against Omarova’s selection to no avail. Just this week, as reports emerged of a minor legal issue from many years ago regarding Omarova, the White House doubled down in its support.

All reports indicated a rocky process for Omarova’s hearing and the session highlighted the many questions and issues arising from her nomination. As many Senators pointed out, it is difficult to run away from years of speeches, presentations, and publicly posted papers that outline radical positions that appear to advocate the nationalization of banking services.

The Chairman of the Senate Banking Committee, Senator Sherrod Brown, opened with a fiery defense of the nominee. Senator Brown said:

“They have a formula – start with a passing and inaccurate reference to her academic work. Distort the substance beyond recognition. Mix in words like “Marx,” and “Lenin,” and “communism.” End with insinuations about Professor Omarova’s loyalties to her chosen country. That’s how Republicans turn a qualified woman into a Marxist boogeyman.

I’ll let Professor Omarova tell her own story but I’d venture to guess that those words ring a little differently to those who’ve experienced communist oppression first-hand. We know that a shadowy political group founded by former Trump staff has been fomenting these personal attacks and pushing radical right-wing news sites to spread that misinformation. These inflammatory insinuations continue to stoke the unhinged rhetoric that has poisoned our politics. Now we know what happens when Trumpism meets McCarthyism. It’s a cruelty no person should experience.”

 Senator Pat Toomey, the ranking Republican on the Committee, took a different tack expressing his opinion that Omarova was an “intelligent, knowledgeable, and experienced law professor,” while describing his issue with the nominee:

“My concern with Prof. Omarova is her long history of promoting ideas that she herself describes as “radical.” I agree that they are radical. But I’d also describe them as socialist. In fact, I’ve never seen a more radical nominee to be a federal regulator.”

Senator Toomey mentioned specifically a paper published just last month entitled “The People’s Ledger,” where Omarova outlined her plan to nationalize retail banking.

“Under her plan, “central bank accounts fully replace—rather than uneasily co-exist with—private bank deposits,” said Toomey.

He criticized her advocacy of managing money supply via “FedAccounts” with the government taking money from account holders:

“This, she allows, could be “perceived as the government ‘taking away’ people’s money.” I think I know why—because it is the government taking away people’s money.”

Noting that Omarova wants community banks to be controlled by the government, Toomey added, “it’s no wonder the Independent Community Bankers of America and banking associations from 41 states so far oppose her nomination.”

Toomey slammed Omarova’s extreme views:

“Prof. Omarova’s radical ideas don’t stop there. She has a plan for the government, through the Fed, to replace the free market in setting what she calls “systemically important prices” for things like food, wages, and energy. And since the administration’s done a great job on inflation, I’m sure Americans can’t wait until the Fed starts directly controlling prices for eggs, milk, and rent, too. This isn’t the only time Prof. Omarova has expressed support for government controls on wages. As she tweeted in 2019: “Say what you will about old USSR, there was no gender pay gap there. Market doesn’t always ‘know best’.”

Toomey believes that Omarova supports socialist ideas that have “failed everywhere” they have been tried.

Republican Senator Tim Scott, briefly stated “I cannot think of a nominee to be more poorly suited …. than you are….” noting Omarova has called financial services a “butthole” industry.

While receiving staunch support from left-wing Senator Elizabeth Warren who called the criticism of Omarova “a vicious smear campaign” because “Wall Street feels threatened so they launched a personal assault,” several Democrats voiced their concerns regarding the nominee.

Senator Jon Tester, a Democrat from Montana, questioned Omarova’s criticism of private capital allocation while apparently favoring national, or government intervention to fund preferred ventures. This smacks of a command economy – the philosophy that sank the Soviet Union. Senator Mark Warner, a Virginia Democrat, said he too shares Senator Tester’s disappointment of Omarova.

While certain Democrats may believe the hearing represented “modern-day McCarthyism,” Republican Senator Thom Tillis aptly explained, “our concerns are solely based on your written record.” A statement that is hard to counter.

While Omarova attempted to minimize her long history of radical beliefs there may be too many to recover a sinking nomination. Senator Brown hurried to end the hearing and halt the questioning reflecting his desire to stop the discussion and, perhaps, cut the losses.

 

 

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