Biden Nominee For Top Banking Regulator Facing Growing Resistance In Senate

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by Tyler Durden
Wednesday, Oct 20, 2021 - 08:30 PM

Unsurprisingly, some influential Senate Democrats are getting cold feet about the prospect of President Biden nominating Saule Omarova to lead the OCC. The  Cornell law professor educated in the USSR who has proposed that the Fed take over most retail banking activities from the private sector (which a Fedcoin - or ZuckCoin - just might help it to do) while wholeheartedly supporting the progressives' "Green New Deal" agenda.

This has, understandably, made many in both Congress, and the industry she is about to regulate, uncomfortable.

As we have reported, Omarova has previously favorably compared  the USSR to the US - at least when it comes to the "gender pay gap".

"Until I came to the US, I couldn’t imagine that things like gender pay gap still existed in today’s world. Say what you will about old USSR, there was no gender pay gap there. Market doesn’t always ‘know best,’" Omarova tweeted in 2019, adding (after receiving harsh criticism) "I never claimed women and men were treated absolutely equally in every facet of Soviet life. But people’s salaries were set (by the state) in a gender-blind manner. And all women got very generous maternity benefits. Both things are still a pipe dream in our society!"

Additionally, as the Wall Street Journal editorial board notes, "Ms. Omarova thinks asset prices, pay scales, capital and credit should be dictated by the federal government. In two papers, she has advocated expanding the Federal Reserve’s mandate to include the price levels of “systemically important financial assets” as well as worker wages. As they like to say at the modern university, from each according to her ability to each according to her needs."

In a recent paper “The People’s Ledger,” she proposed that the Federal Reserve take over consumer bank deposits, “effectively ‘end banking,’ as we know it,” and become “the ultimate public platform for generating, modulating, and allocating financial resources in a modern economy.” She’d also like the U.S. to create a central bank digital currency—as Venezuela and China are doing—to “redesign our financial system & turn Fed’s balance sheet into a true ‘People’s Ledger,’” she tweeted this summer. What could possibly go wrong? -WSJ

Omarova also wants to create a "Public Interest Council" of "highly paid" academics who would wield subpoena power over regulatory agencies, including the Fed.

But President Biden has put these concerns aside and said he plans to nominate Omarova, though he has yet to make it official. Many speculate her nomination is mostly a sop to the party's progressive wing, since even Treasury Secretary Janet Yellen opposes her nomination.

But according to a report published Wednesday by CNBC, Omarova's nomination is running into resistance in the Senate, including among key Democratic members of the committee that must approve her nomination before it goes before the entire Senate.

Senate Democrats are fractured over whether to support Saule Omarova, Biden’s indicated choice to lead the Office of the Comptroller of the Currency, jeopardizing her candidacy.

Any Democratic defection, or an indication of such, could force Senate leadership to scrap the nomination before putting Omarova up to a vote.

According to CNBC's main source (who remains anonymous) is that these Senators have already shared their misgivings with President Biden.

Her selection, coupled with her views on how to overhaul the US banking system, prompted several Senate Democrats or their staff to complain to the White House and suggest that the president’s choice will be tough to support on Capitol Hill, according to a person familiar with the matter.

This person declined to be named in order to speak openly about private discussions between the White House and Senate offices.

Others surrounding the OCC nomination process said a handful of moderate Democrats harbor reservations about Omarova and her aspirations to “end banking as we know it,” as she suggested in a Vanderbilt Law Review article.

Those people cautioned that skeptical senators likely haven’t made a final decision yet but are leaning against her candidacy.

But it's not just the whispers of anonymized sources from the Hill suggesting that the nomination of what would be America's first formerly Communist chief of the OCC (Saule once earned a "Lenin" award back in the USSR, which has favorably compared to the US in at least one notable instance) is in trouble. Sen. Jon Tester of Montana, a critical red state Democrat and community banking champion, told CNBC that he's having second thoughts - though he didn't say he opposes the nomination.

Sen. Jon Tester of Montana told CNBC on Tuesday that he has "concerns about Omarova’s candidacy. Tester, known in the Senate as a champion of community banks, did not indicate whether he opposes her outright.

"Some of Ms. Omarova’s past statements about the role of government in the financial system raise concerns about her ability to impartially serve at the Office of the Comptroller of the Currency," he said. "I’m looking forward to meeting with her to discuss them."

Tester, a moderate member of the Senate banking committee, would also vote on whether to recommend Omarova to the broader chamber. A representative for Sen. Mark Warner, another moderate on the banking committee, said the Virginia Democrat has not yet made a decision on whether to support Omarova.

Of course, Senate progressives like Sherrod Brown of Ohio still full-throatedly back Saule's nomination.

The office of banking committee Chairman Sen. Sherrod Brown, D-Ohio, a fierce advocate of Omarova’s, reiterated its support for Biden’s pick.

"Senator Brown and the White House continue to push back against Republicans’ misleading statements against Ms. Omarova’s character and policy positions," a spokesperson said.

The White House continues to support Omarova’s nomination, an official said.

In a sign of how little the leadership wants to deal with this right now, with so many other Democratic priorities being hammered out, including Biden's entire domestic agenda, when approached by CNBC, Senate Majority Leader Chuck Schumer refused to even return their request for comment.

At the very least, the takeaway from all of this is that even if Omarova's nomination isn't already dead in the water, the Dems won't have the bandwidth to deal with a high-profile nomination fight until next year.