Biden pick for top regulator under fire for floating 'radically reshaping' system to 'end banking'

Biden pick for top regulator under fire for floating 'radically reshaping' system to 'end banking'
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Saule Omarova has advocated for ending banking “as we know it” — and she is now in contention to oversee the country’s banks.

Late last month, President Joe Biden announced his intent to nominate Omarova, a Cornell University law professor, to be comptroller of the currency. Her nomination is expected to generate fierce opposition from Republicans and could be derailed by just one centrist Democrat’s vote.

Omarova was born in Soviet-controlled Kazakhstan and attended Moscow State University on the Lenin Personal Academic Scholarship, graduating in 1989. In a recent paper titled "The People’s Ledger: How to Democratize Money and Finance the Economy," Omarova offers a blueprint for “radically reshaping the basic architecture and dynamics of modern finance.”

The article calls for radical changes to the way the U.S. banking system operates by giving the Federal Reserve near total control of the entire financial system. She suggests that the central bank’s balance sheet should be redesigned to operate as “the ultimate public platform for both modulating and allocating the flow of sovereign credit and money in the national economy.”


In the “exploratory exercise,” she essentially promotes the nationalization of the banking system by envisioning a system in which Fed accounts don’t compete with private bank deposits but “fully replace them.”

“Banks, in other words, will not be ‘special’ anymore,” Omarova wrote. “By separating their lending function from their monetary function, the proposed reform will effectively ‘end banking,’ as we know it.”

Amid the COVID-19 pandemic, she also raised the idea of a National Investment Authority, a new government bureaucracy that would act directly in financial markets to allocate “both public and private capital” to fight inequality, climate change, and other societal ills.

Remarks Omarova has made on Twitter about the USSR also generated waves following the announcement of her forthcoming nomination.

“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,’” she wrote.

Responding to a Twitter user who pushed back on the notion, she followed up with: “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!”

Her nomination faces an uphill battle in the Senate given her academic musings. A senior Republican Senate aide told the Washington Examiner on Friday that it is going to be very difficult for business-friendly Democratic senators such as Mark Warner of Virginia, Kyrsten Sinema of Arizona, Joe Manchin of West Virginia, and Jon Tester of Montana to get on board with Biden’s pick.

The offices of Manchin, Tester, and Sinema didn’t respond to inquiries from the Washington Examiner. Warner’s office declined to comment on the matter.

Those lawmakers are already feeling pressure from interest groups, with the U.S. Chamber of Commerce publicly coming out against Omarova. In a letter to the Banking Committee, Chamber Executive Vice President Neil Bradley said his group, the world’s largest business organization, “strongly opposes” her nomination.

“The Chamber generally believes that presidents deserve some degree of deference towards their nominees. That deference assumes nominees are inclined to the faithful execution of the law, not the pursuit of radical policy agendas inconsistent with the obligations of the position of trust they are being nominated to hold,” he said.

In a statement provided to the Washington Examiner, American Bankers Association President Rob Nichols said that while the association recognizes the “historic nature” of Omarova’s nomination — she would be the first woman and minority to serve in the role — its members are worried about some of her economic ideas.

“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,” Nichols said. “Her proposals to effectively nationalize America’s community banks, end regulatory tailoring based on risk and eliminate the dual banking system are particularly troubling.”

Likewise, Sen. Pat Toomey, the top Republican on the Banking Committee, also criticized Omarova.

“Ms. Omarova has called for ‘radically reshaping the basic architecture and dynamics of modern finance’ including nationalizing retail banking and having the Federal Reserve allocate credit,” the Pennsylvania Republican said. “She has also advocated for ‘effectively end[ing] banking as we know it.’ In light of these, and other extreme leftist ideas, I have serious reservations about her nomination.”


Her nomination comes after Republicans also expressed concern over the confirmation of Rohit Chopra, an ally of Democratic Sen. Elizabeth Warren of Massachusetts, to lead the Consumer Financial Protection Bureau. He was confirmed on Thursday in a party-line vote, with no Republicans voting in favor.

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Tags: News, Currency, Bank, Finance and Banking, Presidential Nominees, Nomination, Congress, White House

Original Author: Zachary Halaschak

Original Location: Biden pick for top regulator under fire for floating 'radically reshaping' system to 'end banking'

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