By Chris Matthews
Saule Omarova, President Joe Biden’s pick to oversee the nation’s largest banks, withdrew her candidacy Tuesday amid bipartisan opposition to her views on banking regulation.
The Cornell University law professor and former George W. Bush Treasury official drew fierce opposition from Senate Republicans for a recently published academic paper that speculated on the possibility of the Federal Reserve offering retail banking accounts to Americans and having those accounts ” fully replace—rather than compete with—private bank deposits.”
If she had been confirmed as comptroller of the currency, Omarova would not have had the authority to implement the ideas proposed in the paper, but Republicans said the paper and other past statements suggested a hostility to the banking sector that would be disqualifying for the role.
The OCC, housed within the Treasury Department, is the primary regulator of nationally chartered banks, including Goldman Sachs Group Inc. /zigman2/quotes/209237603/composite GS -7.20% , Wells Fargo & Co. /zigman2/quotes/203790192/composite WFC -1.89% and Bank of America Corp. /zigman2/quotes/200894270/composite BAC -3.34%
“Taken in their totality, her ideas amount to a socialist manifesto for American financial services,” said Sen. Pat Toomey of Pennsylvania, the ranking Republican on the Senate Banking Committee, during a November confirmation hearing. “She wants to nationalize the banking system, put in place price controls, create a command-and-control economy where the government allocates resources explicitly.”
The confirmation hearing became particularly contentious after Republican Sen. John Kennedy of Louisiana questioned Omarova about growing up in the former Soviet Union and her childhood associations with the Communist Party. Kennedy asked whether Omarova was a member of the USSR’s “communist youth organization,” and said that he didn’t “know whether to call you professor or comrade.”
“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,” Biden said in a statement Wednesday. “But unfortunately, from the very beginning of her nomination, Saule was subjected to inappropriate personal attacks that were far beyond the pale.”
It was moderate Democratic opposition to Omarova that doomed her candidacy. Montana Democratic Sen. Jon Tester said during the hearings that “I have significant concerns about positions that you have taken…related to our financial system bank regulations,” pointing to her criticism of a 2018 law that loosened regulations on financial firms with between $50 billion and $250 billion in assets.
Politico reported last month that upwards of seven Democrats had “reservations” about Omarova. She would have needed universal support from her party, given the current 50-50 split between Democrats and Republicans in the Senate.