Mar 26, 2021 - Politics & Policy

Racial wealth gap becomes an issue for Biden bank regulator pick

Jamaal Bowman

Rep. Jamaal Bowman. Photo: Stephanie Keith/Getty Images

President Biden is under pressure to use a key appointment to push for policies to narrow the racial wealth gap, as Congressional Black Caucus members weigh in on the appointment of a powerful bank regulator.

Driving the news: Rep. Jamaal Bowman (D-N.Y.) and 33 other members of the caucus penned a letter to Biden Thursday urging him to pick Mehrsa Baradaran, an expert on the wealth gap, to lead the Office of the Comptroller of the Currency.

Why it matters: The OCC is the primary regulator of all national banks. Members of the CBC see the person leading the agency as someone who could level the playing field for those who have faced discrimination from banking institutions.

  • Progressives helped sink the prospects of Michael Barr to run the agency, citing his ties to the financial technology industry and a lack of a track record of fighting against predatory lending and other issues that have harmed communities of color.
  • The Congressional Hispanic Caucus has backed their own candidate for the position: Manuel Alvarez, the commissioner of the California Department of Business Oversight.
  • But the CBC letter suggests the caucus has similar objections to Alvarez.

What they're saying: "We are in a moment of national crisis during which existing economic and racial injustices have been exacerbated by the pandemic, and we need an OCC leader whose values are fully aligned with the needs of working people," the letter states.

  • "Other proposed candidates for the OCC do not have the same track record as Mehrsa on these issues, and in fact, they have ties to internet-savvy lenders which have exploited vulnerable consumers."
  • Baradaran, a banking law professor at the University of California, Irvine School of Law, has written extensively about the racial wealth gap and discriminatory banking policies.
  • She is also a high-profile advocate of postal banking — allowing the post office to provide banking services.

Between the lines: While the letter does not explicitly mention Alvarez, Democratic aides say part of the resistance toward him stems from his ties with the fintech industry.

  • He also served as a deputy attorney general under then-California Attorney General Kamala Harris.

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