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Biden pick for bank regulator says critics ‘demonise’ her identity

Joe Biden’s pick to head up a major US bank regulator has hit back at her critics in Congress and Wall Street, accusing some of them of singling her out for being a woman and a minority candidate.

The US president announced last month he intends to appoint Saule Omarova as comptroller of the currency, which supervises national banks including Bank of America and Wells Fargo.

Since then, however, she has faced a backlash from Republicans and the banking industry. Critics have focused on her Soviet upbringing and her more recent career as an academic with proposals including a state-run bank account system.

“There is definitely a different standard applied to someone like me,” Omarova, who was born in what is now Kazakhstan, said in an interview with the Financial Times.

“I am an easy target: an immigrant, a woman, a minority,” she added. “I don’t look like your typical comptroller of the currency, I have a different history. I am easy to demonise and vilify.”

Asked if she thought some of the criticism of her was racist, Omarova replied: “I think that is true.”

The Office of the Comptroller of the Currency oversees banks with $14.9tn in assets, issuing rules on how lenders can do business and granting licences for new banks to operate. An independent branch of the Treasury department, the OCC is also potentially important for regulating cryptocurrencies.

The opposition to Omarova from Republicans and bank lobbyists has prompted concern at the Biden administration that she might fail to secure enough support from moderate Democrats to win Senate confirmation.

Pat Toomey, the most senior Republican on the Senate banking committee, told senators last week: “I don’t think I’ve ever seen a more radical choice for any regulatory spot in our federal government.”

Rob Nichols, chief executive of the American Banking Association, said in a statement: “We have serious concerns about her ideas for fundamentally restructuring the nation’s banking system which remains the most diverse and competitive in the world.”

Omarova’s critics have focused on two main parts of her background: her upbringing in the Soviet Union, where she wrote a paper on Karl Marx while studying at Moscow State University; and a paper she authored last year in her role as a law professor at Cornell University.

Her more recent paper argued for a state-run bank account system whereby every American has a deposit account with the Federal Reserve, rather than with a private lender. Private banks would still be allowed to lend, although she also argued for the creation of a separate Fed-run vehicle which would help finance public infrastructure projects.

In a reference to a 2014 book titled The End of Banking, she wrote: “By separating their lending function from their monetary function, the proposed reform will effectively ‘end banking’ as we know it.”

Toomey last week asked Omarova to submit a copy of her undergraduate paper on Marx, adding: “How does it even happen that it occurs to someone to think of these things? Maybe a contributing factor could be if a person grew up in the former Soviet Union and went to Moscow State University and attended on a V I Lenin academic scholarship.”

Omarova would not disclose whether she intended to submit the essay, though she had not done it by the Wednesday deadline set by Toomey. She said: “I was in the Soviet Union, where there was no academic freedom, and this was a mandatory assigned topic. What I wrote in that paper has nothing to do with what I believed in then or in what I believe in now.”

She also denied suggestions she has communist sympathies, saying: “My grandmother was orphaned because Stalin sent her entire family to Siberia and they died there. Her family was destroyed because they were educated Kazakhs who didn’t join the party.

“I was really lucky to get to Moscow State University . . . I was 18, and within a year I became an anti-communist like most of my classmates. We were reading stuff that was prohibited. We were listening to Pink Floyd, which was illegal, we were talking about Solzhenitsyn [the author and Soviet dissident].”

Supportive senators are now mounting a lobbying campaign to save her nomination, led by Sherrod Brown, the Democratic chair of the Senate banking committee.

Brown said: “Even though she would be the first woman, first immigrant and first person of colour to lead the agency in its 158-year history, I am still surprised at how vicious the Republican smears and personal attacks have been.”

Omarova said she believed the criticism was motivated more by concerns over her imposing more stringent banking regulation than her gender or her ethnicity.

“What Wall Street banks worry about is that I am going to be an independent, strong-minded regulator who is not one of them, who is not beholden to them,” she said.

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