STEVE INSKEEP, HTE:
President Biden’s choice to be one of the main banking regulators withdrew his appointment. Willow Omarova faced opposition from Republicans and skepticism from some Democrats. Some lawmakers had sincere disagreements with her academic research, and a few subsequently suggested that she was a Communist because this American citizen was born in the former Soviet Union. NPR’s David Gura is here. David, hello.
DAVID GURA, BYLINE: Hello, Steve.
INSKEEP: Why was Willow Omarova nominated in the first place?
GURA: Well, she’s a professor of law at Cornell University, an expert in financial regulation, and she’s been a pretty prolific academic researcher as well. President Biden has chosen Omarova as the next controller of the currency, which is important work. The Office of the Comptroller of the Currency oversees about a thousand banks nationwide, including some of the larger ones, but also many smaller community banks.
Omarova had the support of progressives because, in her research, Steve came up with some pretty daring ideas to remake America’s financial system. And she has always championed a tougher approach to regulating banks. But many other lawmakers viewed these views as, I quote, “too radical.” You know, as the weeks went by, Omarova’s path to confirmation seemed to become more and more difficult, especially as some Democrats expressed hesitation. So she decided to stop. She wrote a letter to the White House which was published Tuesday in which she wrote, I quote, “it is no longer tenable for me to continue as a presidential candidate.”
INSKEEP: What exactly did she write about what seemed too radical for some senators?
GURA: Yeah, let’s dig deeper into this academic research. Some of what Saule Omarova came up with is quite provocative. She called one of her controversial articles, I quote, “a plan for a complete restructuring of the basic architecture of modern finance.” She suggests the Federal Reserve could get into retail banking, that Americans could open bank accounts with the Federal Reserve, in part to reduce the number of people who don’t have bank accounts. Now Republican lawmakers, along with several banking groups, have suggested that by making this argument, Omarova is someone who wants to nationalize the US banking industry. She denied this in a contentious confirmation hearing a few weeks ago.
Omarova tried to distinguish between the arguments she made as an academic and what she would do if she made a policy emphasizing that she would always follow the letter of the law. Here is what Omarova told Senator Patrick Toomey, the highest ranking member of the banking committee.
(EXTRACT FROM THE ARCHIVED RECORD)
SAULE OMAROVA: I just want to clarify. My job as an academic was to push the boundaries of academic debate and identify potential options that Congress might consider. Whether or not to take this route is entirely up to Congress.
PAT TOOMEY: Of course, of course, ultimately.
GURA: Several lawmakers, Steve, including Senator Toomey, didn’t seem to think this distinction made by Omarova made much of a difference.
INSKEEP: Well, some of them are classic debates. Does a public servant obey the law and do his job or follow his personal beliefs, for example? And what kind of banking industry do you really want? This seems to be a legitimate topic of debate. But it seems to me that the confirmation battle went beyond that.
GURA: Yeah, it got pretty ugly sometimes, Steve. Willow Omarova is an American citizen, as you mentioned. She was born in the former Soviet Union in present-day Kazakhstan. She obtained her undergraduate degree from Moscow State University. And in a dramatic exchange during that confirmation hearing, Republican Senator John Kennedy asked Omarova about her education and beliefs.
(EXTRACT FROM THE ARCHIVED RECORD)
JOHN KENNEDY: I don’t mean disrespect. I don’t know if I should call you teacher or classmate.
UNIDENTIFIED PERSON: Oh, my God.
OMAROVA: Senator, I am not a communist. I do not subscribe to this ideology. I couldn’t choose where I was born.
GURA: President Biden, in his statement, said that Omarova was, I quote, “subject to inappropriate personal attacks that were far beyond the pale”. The chairman of the banking committee echoed this. Democratic Senator Sherrod Brown of Ohio has said that Omarova is the subject of a relentless smear campaign recalling Red Scare McCarthyism Steve and powerful interests, as he said, have shamefully attacked his family, his heritage and his commitment to American ideals.
INSKEEP: I’m just dwelling on Senator Kennedy’s opening words – I don’t mean disrespect, he said, and then he went on to say what he said. What shall we do now?
GURA: Well, President Biden says he will continue to work to find a candidate for this position. See; the administration’s ideal candidate is someone who could help advance their regulatory agenda, who could try to curb banks, who could reduce the number of unbanked Americans, who don’t have bank accounts. Basically Steve, they’re looking for someone who has this progressive good faith but who can also be confirmed by Congress.
INSKEEP: David, thanks for the update. I really appreciate.
GURA: Thanks, Steve.
INSKEEP: This is David Gura from NPR.
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