“Socialist manifesto for American financial services”: Republicans blow up choice of Biden banking regulator Omarova in heated hearing
Senate Republicans clashed with President Joe Biden’s candidate for federal chartered bank regulator in a confirmation hearing Thursday.
Biden appointed Cornell law professor Saule Omarova as Comptroller of the Currency, a regulator hosted by the U.S. Treasury Department that oversees some of the nation’s largest banks, including Goldman Sachs Group Inc. GS,
Wells Fargo & Co. WFC,
and Bank of America Corp. BAC,
“Taken in their entirety, his ideas amount to a socialist manifesto for American financial services,” said Sen. Pat Toomey of Pennsylvania, the leading Republican on the Senate Banking Committee. “She wants to nationalize the banking system, put in place price controls, create a command and control economy where the government explicitly allocates resources.”
Toomey was referring to an article by Omarova published last year in which she speculated that the Federal Reserve might offer retail bank accounts to Americans and that those accounts would “entirely replace – rather than compete with – the private bank deposits â.
Toomey and other Republicans interpreted the article as Omarova arguing for a complete public takeover of the retail banking system. She argued that the paper was just an academic exercise to understand the implications of the emergence of both private digital currencies like Diem, a stable coin initially offered by Facebook, and public digital currencies like a dollar. digital issued by the Fed.
“This article was written in the context of an ongoing academic debate on how to approach the digitization of the dollar, as it seems inevitable,” she said.
Several Democrats have also expressed reservations about Omarova’s past statements, including Democratic Senator from Montana Jon Tester.
âI am very concerned about the positions you have takenâ¦ regarding the banking regulation of our financial system,â Tester said, highlighting his criticism of a 2018 law that relaxed regulations on financial companies with assets between 50 and 50%. and $ 250 billion.
Tester is one of seven Democrats that Politico reported Thursday have “reservations” on his appointment. Other members of the banking committee, Senator Mark Warner of Virginia, Senator Kyrsten Sinema of Arizona, and Senator Raphael Warnock of Virginia.
In a Senate split 50-50 between Democrats and Republicans, Omarova would need the unanimous support of Senate Democrats to be confirmed.
The most controversial moment in the hearing was when Republican Senator John Kennedy of Louisiana asked Omarova about her childhood in the Soviet Union and her childhood associations with the Communist Party. Kennedy asked if Omarova was a member of the USSR’s “Communist Youth Organization” and said he “didn’t know if he should call you professor or comrade.”
Omarova replied that she was a member of Komsomol, a group of young communists who “were part of normal progress in school”. Kennedy then asked if she had already officially resigned from the organization, which prompted Democratic Senator Sherrod Brown, chairman of the committee, to interrupt Senator Kennedy to point out that Omarova “renounced her Soviet citizenship” ago. over thirty years.
“Prior to this hearing, we have witnessed in my memory the worst character assassination targeting a candidate since I have been here,” Brown said in conclusion, referring in part to Senator Toomey’s public demand in October that Omarova provide. a copy of it. Unpublished undergraduate thesis that she wrote for Moscow State University on the writings of Karl Marx over thirty years ago.
âSenator Kennedy repeated the same vile and disgusting attacks that we have heard from the start,â Brown said. “To attack a candidate’s positions is one thing, to call a candidate ‘comrade’ – as if we don’t know what that means – is quite another.”
Outside analysts are not optimistic about Omarova’s confirmation by the Senate. Capital Alpha Partners analyst Ian Katz predicted in September that there was only a 35% chance it would be confirmed by the Senate.
Meanwhile, analysts at Beacon Policy Advisors wrote in a Thursday memo that there is “a very good chance that at least one moderate Democrat in the Senate could also believe her structural positions are anathema to their own ends. of view “, thus condemning his nomination in the face of the Republican opposition unit.