WASHINGTON — The Biden administration's nominee to lead the Office of the Comptroller took heat from members of both parties, leaving serious questions about whether there are enough votes in the Senate to confirm her.
Saule Omarova, a law professor at Cornell University, testified to the Senate Banking Committee Thursday after weeks of criticism from bankers and lawmakers of her past academic writings as anti-business.
But Omarova sought to distinguish her work as an academic — including her apparent support for a dramatic restructuring of the banking system — from how she would lead the OCC, saying her focus would be different.
“If I am confirmed to lead the Office of the Comptroller of the Currency, my top priority will be to guarantee a fair and competitive market where small and mid-size banks that invest in their neighbors’ homes and small businesses can thrive, and where every community — regardless of wealth, geography, or history — has access to safe and affordable financial services,” Omarova said.
Yet the hearing was punctuated by sharp criticism from Republicans over Omarova's past statements — including her proposal to put retail deposits under the control of the Federal Reserve — and even skepticism about her positions from key moderate Democrats.
“I'm sorry that you’ve had to face what I see as unfair and unacceptable attacks,” said Sen. Jon Tester, D-Mont., referring to GOP-backed suggestions insinuating that Omarova's time in the former Soviet Union points to Marxist beliefs. “I do, however, have some significant concerns about positions that you have taken.”
Tester said he was concerned about Omarova having opposed a 2018 bipartisan bill directed at bank regulatory relief, particularly for small and midsize banks, that he helped write.
“The OCC is responsible for enforcing, implementing and overseeing provisions of the statute,” Tester said of the law, known by many as S. 2155. “So what specifically did you oppose about my bipartisan legislation?”
Omarova's criticism of the bill was that while it was meant to ease the regulatory burden of small banks, she could see larger institutions benefiting. At the hearing, she said had been primarily concerned about “inadvertently loosening the regulatory oversight of the largest financial institutions that engage in high-risk trading operations that do not necessarily follow the traditional, relational banking model.”
“I was fully supportive, and I remain fully supportive, of tailoring regulatory requirements and lightening the regulatory burden on community banks and smaller banks that do not engage in such activities,” she said.
While Omarova for the most part appeared to weather the sharp questioning, it was unclear whether her testimony did anything to clear her tough path to nomination. Numerous Democrats including Tester were known before the hearing to have concerns about her views.
And the Montana senator wasn't the only Democrat on the panel to express skepticism.
"I'm impressed by your intellect, and your background and true American success story. I do have to say, I join my friend, Senator Tester, though, and I'm pretty disappointed in your views on Senate Bill 2155, of which I was proud to be one of the authors as well," said Sen. Mark Warner, D-Va.
Omarova is unlikely to be supported by any Republican, and therefore requires votes from every Democrat in the deadlocked Senate and a tie-breaking vote by Vice President Kamala Harris in order to be confirmed.
Among Omarova's past work drawing scrutiny was an October 2020 paper titled "The People's Ledger," which argued that shifting private bank deposits to balance sheet of the Fed would help serve "the long-term needs of the American people." The proposal has led to overwhelming opposition to her nomination from the community bank lobby, which is rare for a federal appointee.
But some Republicans have made sharper attacks about her background, suggesting socialist leanings from her growing up in Kazakhstan and attending university in Moscow in the 1980s.
Opening remarks from Senate Banking Committee Chair Sherrod Brown, D-Ohio, accused the GOP of fear-mongering.
“Now we know what happens when Trumpism meets McCarthyism,” Brown said. “It’s a cruelty no person should experience.”
Ranking Member Pat Toomey R-Pa., said Omarova's past academic writings raise serious questions.
“Taken in their totality, her ideas amount to a socialist manifesto for American financial services: nationalizing the banking system, putting in price controls, and creating a command-and-control economy where the government allocates resources instead of free men and women making their own decisions about the goods and services they want to buy and sell in an open market,” Toomey said.
Omarova attempted to calm industry and GOP fears by arguing that her academic work would not affect her objectives as comptroller of the currency.
"My job as an academic was to expand the boundaries of the academic debate and outline potential options for Congress to consider," she said. But as comptroller of the currency, Omarova said she believed her job "is to prevent the next crisis."
"It's to make our banking system safe, sound, strong and competitive," she said.
Several GOP senators sought to distance themselves from allegations of Omarova having Marxist sympathies that have been levied some on the right, saying they wanted to focus on the substance of Omarova’s policy beliefs.
But the hearing at times grew raucous. At one point, Sen. John Kennedy, R-La., asked Omarova if she “used to be a member of a group called 'The Young Communists'” during her childhood and whether she had ever resigned from the group. That drew a strong rebuke from Brown who exclaimed: “She renounced her Soviet citizenship!"
Following the testy exchange, Omarova responded: “I’m not a communist. I do not subscribe to that ideology. I could not choose where I was born.”
But another concern of Tester’s revolved around a controversial comment made by Omarova in February during an event hosted by the Jain Family Institute, when the professor
Tester seemed to identify with the smaller-sized business owners who would be affected by that scenario in favor of larger oil and gas corporations.
“In my real life, I'm a small family farmer in eastern Montana. There could be somebody in a position that would say you know what, the big guys are far more efficient,” Tester said. “Do you see how risky that is to make that statement?”
Omarova responded by saying she had misspoken during the event. “I do not intend to advocate that kind of opposition. That particular statement about oil and gas companies going bankrupt — as I said, that was taken out of context and I actually misspoke,” Omarova said. “That was not well-framed.”
Tester’s concerns about oil and gas capital access were shared by many Republicans on the committee, but Omarova maintained that her prior comments on oil and gas companies did not mean that she believed in government control over the allocation of investment capital.
“I believe in private allocation of capital, and I believe in the fact that it should be banks making decisions to which company to lend and, on what conditions, subject to the regulatory and supervisory requirements that they do it prudently,” Omarova said. "The OCC’s job is not to meddle in specific decisions on credit allocation on the ground."
