Saule Omarova, Biden’s Bank Regulator Pick, Withdraws Nomination

The financial regulation lawyer withdrew after coming under fire from Democrats aligned with the banking sector and Republicans smearing her as a communist.
Saule T. Omarova, then a nominee to be Comptroller of the Currency, testifies during her confirmation hearing on Nov. 18.
Saule T. Omarova, then a nominee to be Comptroller of the Currency, testifies during her confirmation hearing on Nov. 18.
Tom Williams via Getty Images

Saule Omarova, President Joe Biden’s nominee to head the Office of the Comptroller of the Currency, withdrew her nomination on Tuesday after facing smears from Republicans that she was a communist and opposition from pro-banking industry Democrats.

In a letter to Biden, Omarova thanked the president for nominating her and withdrew her nomination, noting that “it is no longer tenable for me to continue as a Presidential nominee.” Biden accepted her withdrawal and bemoaned the treatment she received from Republicans in a statement.

“As a strong advocate for consumers and a staunch defender of the safety and soundness of our financial system, Saule would have brought invaluable insight and perspective to our important work on behalf of the American people,” Biden said. “But unfortunately, from the very beginning of her nomination, Saule was subjected to inappropriate personal attacks that were far beyond the pale.”

Omarova is financial law expert and professor at Cornell University Law School who was born in the former Soviet Union and immigrated to the United States in 1991 as a college student. She graduated from the University of Wisconsin-Madison and Northwestern University Law School before working at the white shoe bank law firm of Davis Polk & Wardwell before serving as a special adviser at the Treasury Department in the George W. Bush administration.

She is known in financial regulatory circles for her incisive analyses of how regulatory agencies, like the one she was nominated to lead, opened the door for large financial institutions to make the risky financial decisions that helped cause the 2008 global financial crisis.

Republicans and bank lobbyists used her place of birth and attendance at Moscow State University on a scholarship named after Vladimir Lenin to smear her as a secret communist.

Sen. Pat Toomey (R-Penn.), the ranking Republican on the Senate Banking Committee, called on Omarova to release her 1989 thesis on Karl Marx’s economic theories in “the original Russian.”

During her confirmation hearing, Sen. John Kennedy (R-La.) demanded to know when she “resigned from the young communists,” in reference to a youth group all schoolchildren were required to join in the USSR.

Sen. John Kennedy (R-La.), looks on as nominee to be the Comptroller of the Currency Saule Omarova testifies before the Senate Banking, Housing and Urban Affairs Committee on Nov. 18.
Sen. John Kennedy (R-La.), looks on as nominee to be the Comptroller of the Currency Saule Omarova testifies before the Senate Banking, Housing and Urban Affairs Committee on Nov. 18.
JIM WATSON via Getty Images

“I don’t know whether to call you professor or comrade,” Kennedy added.

Senate Banking Committee chair Sherrod Brown (D-Ohio) fervently pushed back against GOP attacks ahead of and during Omarova’s confirmation hearing, calling them “vile, disgusting attacks” reminiscent of “red scare McCarthyism.”

“Despite her unquestioned expertise and her bipartisan record, powerful interests distorted Professor Omarova’s views and writings,” Brown said in a statement on Tuesday. “In a relentless smear campaign reminiscent of red scare McCarthyism, they have shamefully attacked her family, her heritage, and her commitment to American ideals. I am disappointed that these spurious attacks and misrepresentations of Professor Omarova’s views were not resoundingly rejected in a bipartisan manner.”

In the end, the Republican-led smear campaign did not sink Omarova’s nomination. She could have advanced had she received the support of all 50 members of the Senate Democratic caucus. But Democrats who joined with Republicans to co-author a 2018 law weakening post-financial crisis banking regulations that Omarova publicly opposed at the time were openly skeptical of her nomination at her November 18 confirmation hearing.

Sen. Mark Warner (D-Va.) said he was “pretty disappointed in your views” on the Economic Growth, Regulatory Relief, and Consumer Protection Act that he helped author at Omarova’s confirmation hearing.

Sen. Jon Tester (D-Mont.), another author of the deregulation bill, also expressed “some significant concerns about positions you’ve taken.”

Warner and Tester reportedly joined Democratic Sens. Kyrsten Sinema (Ariz.), Mark Kelly (Ariz.) and John Hickenlooper (Colo.) in telling the White House and Brown that they would oppose Omarova’s nomination, according to an Axios report.

Biden made no mention of Democratic opposition to Omarova’s nomination in his statement accepting her withdrawal. But Toomey did in a statement released after her withdrawal.

“During the confirmation process, a bipartisan consensus emerged that Professor Omarova’s self-proclaimed radical ideas for America’s financial system were not suitable for our nation’s top banking regulator,” Toomey tweeted.

Omarova was seen as a compromise pick to lead the nation’s top banking regulator after a fight over whether Biden would pick Michael Barr, a former deputy to Obama Treasury Secretary Tim Geithner and a favorite of moderates and the banking industry, or Mehrsa Baradaran, a bank law professor who has written on the relationship between banks and Black people and the poor favored by progressives, ended in a stalemate.

She would have joined Biden’s other regulatory nominees including Federal Trade Commission chair Lina Khan, Department of Justice Antitrust chief Jonathan Kanter and Securities and Exchange Commission chair Gary Gansler as the most aggressive team of corporate regulators seen in Washington in decades. Now, it is back to the drawing board.

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