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Wednesday, July 17, 2024 | Back issues
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Hunt for hammer and sickle breaks out at confirmation hearing of banking regulator

Accusations of communist sympathies sent a normally mundane meeting of the Senate Banking Committee into chaos. 

WASHINGTON (CN) — Seventy years away from McCarthyism, a hearing on the woman nominated to be America's top banking regulator saw Republican senators looking for red in Saule Omarova’s roots.

Omarova moved to the U.S. as a university student in 1991 — the same year her home country of Kazakhstan became the last country to leave the USSR and the Soviet Union was officially disbanded.

“I don’t know whether to call you professor or comrade,” Louisiana Senator John Kennedy, a Republican, told Omarova on Thursday as the Senate Banking Committee considered her nomination to serve as comptroller of the currency. 

“I'm not a communist,” Omarova responded. “I do not subscribe to that ideology. I could not choose where I was born.” 

Senator Mike Rounds said that he could picture Omarova — who is a law professor at Cornell — having academic discussions in her classroom over economic topics, but he would not trust her to run the Office of the Comptroller of the Currency. 

“It would seem to be that in a classroom, you would have a very lively discussion with members of your class — and I suspect that would be entertaining — but I'm really challenged to see how that could be put into and that you would be trusted to be the person responsible for the management, or at least the oversight of these different banks,” said Rounds, a Republican from South Dakota. 

Massachusetts Senator Elizabeth Warren labeled the attacks against Omarova as sexist and racist. 

“The attacks on your nomination have been vicious and personal, we've just seen them,” the Democrat said. “Sexism, racism, pages straight out of Joe McCarthy's 1950s red scare tactics, it is all there on full display. Welcome to Washington in 2021.” 

Warren said Omarova faced such harsh criticism because she was planning to hold big banks and Wall Street accountable. 

“This is a vicious smear campaign coordinated by Republicans who are doing the bidding of giant banks that want to keep gobbling up smaller competitors, want to keep ripping off their customers, and want to keep getting away with it,” Warren said. “Wall Street feels threatened so they have launched an ugly personal assault on a respected person who never sought the spotlight. It is disgusting, and anyone who participates in this malicious character assassination should be ashamed of themselves.” 

Senator Bob Menendez, a Democrat from New Jersey, said the financial institutions were scared of Omarova because she wasn’t part of their system, which has traditionally protected the big banks even when they did wrong. 

“I think maybe some within the financial institutions who oppose your nomination is because you're not on the same ole boys' system and therefore are concerned about how you might ultimately regulate,” Menendez said. 

Ranking Member Pat Toomey entered letters into the record from 65 industry, taxpayer advocate, consumer and women’s organizations against Omarova’s nomination. 

Omarova faced harsh criticism over her academic writing, which was repeatedly cited by members of the committee. One work that received particular criticism was a paper concerning oil and gas companies. Republicans on the committee characterized this writing as Omarova advocating for bankrupting these companies. Omarova said that would be a mischaracterization of her work and said she recognized the importance of oil and gas companies to the economy. 

Omarova was accused of following a radical socialist agenda. 

“Your nomination to a senior government role underscores that President Biden and the Democrats are driving America full speed down the collapse road towards socialism,” Senator Bill Hagerty said. 

While she was accused of promoting a radical agenda, Omarova reminded the committee that, in the role for which she has been nominated, she would not actually have the power to decide which businesses get loans or what activities the U.S. wants to promote.  

“It is not the job of the OCC to decide which specific business should or should not get a specific loan for from a specific bank,” Omarova said. “I have never advocated that, and I believe that it is up to up to Congress.” 

As comptroller of currency, Omarova would oversee national banks and federal savings associations. During the hearing, she focused on how she would bolster small and midsize community banks. 

“I think it is absolutely critical to make sure that community banks and their role in the provision of financial services is preserved,” Omarova said. 

Omarova was critical of Facebook and other tech companies who are promoting the use of digital currency. Some of her writing addressed this issue. 

“My concern — and it's not only my concern it is a concern of a lot of academics — is that in the system, where a lot of private actors, particularly big private actors like Facebook, for example, can issue their own version of currency that can potentially outpace and even misplace the U.S. dollar,” Omarova said. “That could have implications far beyond what we typically consider in the banking regulatory sphere, but it might undermine our monetary sovereignty and the value of the dollar.” 

The hearing ended after over two hours with Toomey requesting that the committee extend the hearing so his members could continue to ask Omarova questions. Senator Sherrod Brown denied this request, however, saying members could submit questions to the nominee if they did not get to ask them during the hearing. 

Follow @KelseyReichmann
Categories / Financial, Government, Politics

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