32-year-old article on Karl Marx surfaces as GOP clashes with Biden’s candidate for bank regulator

A generally low-key position in the financial system has drawn more attention than usual due to opposition to President candidate Joe Biden.

Willow Omarova, 55, was appointed by Biden in September to become the next Comptroller of the Currency, which would make her part of a federal agency that oversees the banking industry. Omarova could become the first woman and person of color to head the agency created by the National Currency Act of 1863.

Part of the opposition to Omarova’s appointment, according to the Associated Press, stems from her previous criticisms of the banking sector that could make her a harsh regulator of Wall Street. Some Republicans and conservative media have also questioned Omarova’s legacy and what they think it might mean for her thoughts on how banking in the United States should work.

Born in Kazakhstan while part of the Soviet Union, Omarova immigrated to the United States in 1991 and worked as a lawyer and law professor at Cornell University. She has testified as an expert in financial regulation on several occasions and was a special advisor to the Treasury Department during the administration of George W. Bush.

In a letter to Omarova after her appointment, Republican Senator Pat Toomey requested a copy of a graduation document she wrote about Karl Marx “in native Russian” when she was a student at the Moscow State University, the AP reported.

Omarova told The Associated Press that the document Toomey was referring to was part of her required courses as an undergraduate student and does not see how this is relevant to her current appointment.

“You write what you were supposed to write. It was not the kind of country where you had the freedom to disagree with the totalitarian regime,” she said. “Frankly, it’s amazing that 32 years later this newspaper has somehow returned from the land of the dead.”

Omarova will appear before the Senate Banking Committee on Thursday as part of the nomination process.

For more Associated Press reporting, see below.

The United States Capitol in Washington is premiered on December 29, 2020. Willow Omarova, 55, was named this month to be the country’s next comptroller of the currency. If confirmed, she would be the first woman and person of color to run the 158-year-old agency. Omarova will appear before the Senate Banking Committee on Thursday as part of her appointment.
Pablo Martinez Monsivais / Associated press kit

But his appointment met with stiff opposition from Republicans and the banking industry, with Democrats saying some of the criticism echoed the red fear that gripped the United States after World War II.

The Office of the Comptroller of the Currency oversees about two-thirds of the country’s banking system. Critics are also wary of academic writings in which she has proposed substantial revisions to how banks operate in the United States.

Omarova and her supporters say that at best, her critics have unfairly misrepresented her work in academia, and at worst are waging a smear campaign against a longtime expert in financial regulation.

“I criticized the big banks,” Omarova said Tuesday in an interview with The Associated Press. “Because I saw how the 2008 financial crisis happened and I don’t want that experience to repeat itself.”

Republicans opposed to Omarova say their concerns lay mainly in her past writings and public comments. Last year, she published an article arguing for an overhaul of the country’s banking system that would expand the role of the Federal Reserve by allowing the central bank to hold consumer deposits. Proponents of such a move say the Fed could extend credit faster if needed to individual accounts during an economic downturn. After the Great Recession, banks accumulated deposits and lent little to rebuild their balance sheets.

On the surface, such a proposal could deprive banks of one of their essential sources of funds for lending.

Omarova says the newspaper’s goal was deliberately ambitious and far-reaching, setting aside the political realities of the time. It was written during the COVID-19 pandemic, she said, when trillions of dollars in government aid went to Americans due to the financial fallout from the pandemic. Her proposals require an act of Congress, she said.

“The purpose of this article was basically to push the ongoing academic debate on how to make our financial system more accessible to all,” she said.

Toomey, the ranked Republican on the Senate Banking Committee, said Omarova’s previous academic work disqualified her, calling her proposals too radical for her to oversee the OCC. But her questioning of Omarova’s professional qualifications also extended to a personal level.

In previous comments, Toomey has said that interest in Omarova’s writings from decades ago had nothing to do with her background.

The banking industry has been exceptionally and publicly critical of Omarova’s appointment, mainly raising objections based on its positions on financial regulation.

“Our issues with Dr Omarova have nothing to do with his impressive personal history, but rather his very public support for the end of banking as we know it,” said Rob Nichols, president of influential American Bankers Association, in a speech last month. .

Omarova says opposition from the banking sector is not surprising.

“I think they are concerned about having an independent, strong-minded regulator who has studied how risks have entered the system in previous years,” she told the AP.

The Office of the Comptroller of the Currency is primarily responsible for overseeing medium to large sized banks that operate in multiple states. The OCC is often involved when banks are accused of committing wrongdoing or of threatening the safety and soundness of the financial system. For example, the OCC was heavily involved in the Wells Fargo investigation after it discovered that bank employees had created millions of fake savings and checking accounts for customers.

Omarova continues to receive strong support from the White House as well as most Democrats in the Senate. With Republicans almost guaranteed to be united in opposition, his confirmation will come down to a handful of moderate Democrats such as Jon Tester of Montana, Kyrsten Sinema of Arizona and Joe Manchin of West Virginia. Sinema and Tester both sit on the banking committee.

Willow Omarova, Treasury, Appointment, Controller of the currency
A statue of Albert Gallatin, a former US Secretary of the Treasury, stands in front of the Treasury Building in Washington, DC The National Historic Landmark building is the headquarters of the United States Treasury Department. Willow Omarova, appointed Comptroller of the Currency, was previously special advisor to the Treasury Department under George W. Bush.
Robert Alexander / Getty Images

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