Last week, President Biden nominated a Cornell University law professor who was educated in the Soviet Union to lead the Office of the Comptroller of the Currency (OCC).
Saule Omarova, a graduate of Moscow State University and a recipient of the Lenin Personal Academic Scholarship, should raise eyebrows in the Senate.
If Omarova is confirmed to the position, she will be able to serve a five-year term as comptroller of the currency. As comptroller, Omarova would head the bureau that “charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks.”
On her resume, Omarova states that she was a senior fellow at the Berggruen Institute from 2020-2021. The think tank was founded by Nicholas Bergguren, a self-proclaimed Marxist, and has a history of promoting Chinese communist propaganda in the news.
Omarova will also undoubtedly expand the size, scope, and authority of the OCC to the limit.
She would use her role to push “equity” policies that increase the federal government’s footprint in the market. Most notably, Omarova has advocated for the Federal Reserve to provide deposits and lending for individuals in the country—crowding out any private banking opportunities in the United States. Omarova has explicitly stated her support for replacing private bank deposits with the Federal Reserve in the name of “equity.” Omarova says that, “the ultimate ‘end-state’” in her writing is where “FedAccounts fully replace—rather than compete with—private bank deposits.” This would be a total overhaul of the banking system in the United States. Effectively eliminating all free market competition in the banking system.
Omarova has also expressed the need to continue to assert strong government authority when administering bank charters. In an article from 2015, she and her coauthor opined, “whether it might be time to bridge the gulf between banking and general corporate regulatory regimes – not by making access to bank charters ‘free and easy,’ but by making access to corporate privileges once again expressly conditional on the delivery of public benefits.” No doubt, Omarova has no intention of promoting free market ideologies when regulating federally chartered banks, but instead will likely implement policies to make it harder for banks to conduct business and thus restrict access to capital across the country.
Omarova is not shy about expanding the size of the federal government to prop up every industry in the United States. For example, in an article she wrote in April of 2020, Omarova stated the need for a new permanent federal agency to bail out companies during crises. Omarova states that “Having a permanent institutional platform for coordinating the national crisis response, including bailouts of private companies, would help to ensure that these emergency measures are executed in an efficient, transparent, and democratically accountable, and socially just manner.” Omarova calls this agency the National Investment Authority. She envisions this new centralized investment juggernaut to “act directly in financial markets as a lender, guarantor, securitizer, and venture capitalist with a broad mandate to mobilize, amplify, and direct public and private capital to where it’s needed most.” So, the federal government gets to decide where capital should be allocated, not private banks who actually have shareholders that hold them accountable.
Finally, Omarova is critical of cryptocurrencies. In an article Omarova wrote for the Harvard Law School Forum on Corporate Governance, she claims that cryptocurrencies contribute to financial instability, fail to produce “activity in the real economy,” and “fuel financial speculation on an unprecedented scale.” In light of her opinions on cryptocurrencies, it is unlikely that Omarova would be supportive of potential proposals to engender greater collaboration or partnerships between fintechs and national banks.
When Omarova appears before the Senate Banking Committee for her nomination hearing, senators should ask her hard questions. The Senate needs to avoid confirming someone to the helm of the OCC that will restructure the national banking system to reflect that of a totalitarian regime.