Nov 24, 2021 - Politics & Policy

Scoop: Centrist Dems sink Biden’s nominee for top bank regulator

A woman at a hearing

Saule Omarova listens during her confirmation hearing. Photo: Anna Moneymaker/Getty Images

Five Democratic senators have told the White House they won't support Saule Omarova to head the Office of the Comptroller of the Currency, effectively killing her nomination for the powerful bank-regulator position.

Why it matters: The defiant opposition from a broad coalition of senators reflects the real policy concerns they had with Omarova, a Cornell University law professor who's attracted controversy for her academic writings about hemming in big banks.

  • Their opposition also hints at a willingness of some Democratic senators to buck the White House on an important nomination, even if it hands Republicans a political — and symbolic — victory.
  • Republicans have attacked the Kazakh-born scholar in remarkably personal terms, and turned her nomination into a proxy battle over how banks should be regulated.

Driving the news: In phone call on Wednesday, Sens. Jon Tester (D-Mont.) Mark Warner (D-Va.) and Kyrsten Sinema (D-Ariz.), all members of the Senate Banking Committee, told Sen. Sherrod Brown (D-Ohio) — the panel's chairman — of their opposition.

  • They're joined in opposing her by Sens. John Hickenlooper (D-Colo.) and Mark Kelly (D-Ariz.).
  • The five senators' offices either declined to comment or did not immediately respond to a request for comment.

Go deeper: Biden officials also have heard directly from the senators. They're aware of their deep opposition and know Omarova faces nearly impossible odds for confirmation.

  • Still, they continue to back her publicly.
  • "The White House continues to strongly support her historic nomination," a White House official told Axios.
  • "Saule Omarova is eminently qualified for this position," the official said. "She has been treated unfairly since her nomination with unacceptable red-baiting from Republicans like it’s the McCarthy era."

Omarova tried to salvage her candidacy during a hearing last week, where Republicans savaged her for her previous academic writings about how community banks should be regulated.

  • Her nomination, reflected in an ugly hearing in which Sen. John Kennedy (R-La.) questioned whether he should call the native of the former Soviet Union "professor" or "comrade," became a proxy battle.
  • It split between the banking industry and progressives eager to impose more regulation on it.
  • "The OCC charters, regulates and supervises all national banks and federal savings associations, as well as federal branches and agencies of foreign banks," it says on its website.

The big picture: Now that the president has stared down progressives by renominating Jerome Powell for another term as chairman of the Federal Reserve, ideological fights between centrists and progressives about economic appointments are going to become more pronounced.

  • Progressives like Sen. Elizabeth Warren (D-Mass.) have already indicated they'll work to oppose Powell.
  • Warren does support another Biden move, elevating Fed governor Lael Brainard to the vice-chair position.
  • With centrists like Tester getting their preferred Fed candidate nominated for a second term, they may feel more emboldened to challenge the White House on lower-level nominations.
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