Biden’s pick to run a key bank regulator runs into Democratic resistance in the Senate

The OCC is considered among the nation’s most powerful bank regulators, similar in function and rank to the Federal Deposit Insurance Corporation and the Federal Reserve.

The comptroller regulates about 1,200 banks with total assets around $14 trillion, or two-thirds of the entire U.S. banking system. Its representatives work inside the nation’s largest lenders to ensure banks are safe by abiding by federal law, providing fair access to financial services and otherwise examining bank management.

In a committee split between 12 Democrats and 12 Republicans and in a Senate split 50-50, a single “nay” from the majority could doom a presidential nominee. Republicans are universally opposed to her candidacy.

The office of Senate Majority Leader Chuck Schumer, D-N.Y., did not respond to multiple requests for comment.

With precious little time left between now and year’s end, Schumer would likely be hard-pressed to devote resources to a thorny OCC nomination and risk embarrassing the party with the possibility of a failed vote.

Instead, Schumer wants to maximize time and energy sorting out Democrats’ multitrillion-dollar antipoverty and climate reconciliation bill, a defense appropriations measure and another debate about the debt limit.

Omarova, a law professor at Cornell University, has for years advocated for far stricter rules over the banking sector, including moving consumer banking to the Fed from private institutions. Cornell did not immediately reply to CNBC’s request seeking comment from Omarova.

Many Republicans have warned against her candidacy since Biden announced his intent to nominate her last month.

Sen. Pat Toomey, a Pennsylvania Republican and ranking member of the banking committee, said in a press release earlier this month that he doesn’t think he’s “ever seen a more radical choice for any regulatory spot in our federal government.”

“There’s a lot that’s extraordinary and radical here—but maybe the heart of it is that Ms. Omarova doesn’t just want tightened regulation of banks,” he added. “She clearly has an aversion to anything like free market capitalism … in an October 2020 paper called ‘The People’s Ledger,’ she outlined a plan for ‘radically reshaping the basic architecture and dynamics of modern finance.'”

In a recent paper, Omarova championed the “democratization” of money by restructuring the Fed for generating and allocating financial resources across the U.S. economy as a means to combat the advent of thousands of new digital monies and risks posed by cryptocurrencies.

“This Article offers a blueprint for reshaping the basic architecture and dynamics of modern finance,” she wrote. “Doing so is especially urgent in light of the ongoing digitization of finance, which includes rapid proliferation of privately issued digital money and privately run digital payments systems.”

The Biden administration has failed to fill the OCC job to date. Progressive opposition forced the White House to abandon prior nominee Michael Barr earlier this year, leaving former Fed official Michael Hsu to serve as the acting OCC chief since May.

Article source: https://www.cnbc.com/2021/10/19/biden-pick-to-run-bank-regulator-faces-democratic-resistance-in-senate.html