GOP paints Biden’s choice of bank regulator as extremist

GOP paints Biden’s choice of bank regulator as extremist

Washington President Joe Biden’s choice to run an agency tasked with overseeing the banking industry faced sharp questioning Thursday from Republican senators, who tried to characterize Sully Amarova as the person who would nationalize the American banking system.

Umarova, 55, was nominated in September to be the next currency controller. If confirmed, the 158-year-old will be the first woman and person of color to run the agency.

Umarova’s nomination was met with stiff opposition from the banking industry as well as Senator Pat Tommy of Pennsylvania, the top Republican on the Senate Banking Committee. Umarova is a long-time academic and respected expert in financial regulation, and she has published several papers during her career in which she proposed wholesale changes to the banking system.

“All in all, her ideas amount to the Socialist Manifesto of American Financial Services,” Tommy said.

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The banking lobby overwhelmingly against her candidacy. In an interview with the Associated Press this week, Omarova said their opposition was largely due to their fears that she would be a tough regulator of Wall Street and banks.

Much of the hearing’s interest was on two moderate Democratic senators sitting on the Banking Committee: John Tester of Montana and Kirsten Sinema of Arizona. Republicans are united in their opposition to Omarova’s candidacy and Tommy and others have attempted to portray Omarova as a radical option in order to persuade Tester and Cinemaa to support.

In his interrogation, Tommy still appeared to be skeptical about Umarova’s candidacy, saying he still had “great concerns” even after meeting her in private. Tommy focused most of his questioning on Omarova’s previous opposition to a bipartisan law that removed some of the framework enacted after the 2008 financial crisis. Tommy was a co-sponsor of that law.

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Umarova said she now sees an advantage in the law, particularly how it reduced the regulatory paperwork needed by small community banks.

Omarova was born in Kazakhstan when it was part of the Soviet Union and immigrated to the United States in 1991. She worked primarily as a lawyer, and for the past several years, worked at Cornell University as a law professor. Over the years, she has testified several times as an expert witness in financial regulation. She worked briefly in the administration of President George W. Bush.

Republicans on the committee focused their questioning or statements on her previous writings and public comments.

Last year, I published a paper calling for a reform of the country’s banking system that would expand the role of the Federal Reserve by allowing the central bank to hold consumer deposits. Supporters of such a move say the Fed could extend credit more quickly when individual accounts are needed during downturns. In the aftermath of the Great Recession, banks hoarded deposits and made little lending to rebuild their balance sheets.

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