Biden Sets Up Senate Battle by Picking Bank Critic to Run OCC

(Bloomberg) -- President Joe Biden has tapped a vocal critic of big banks and cryptocurrencies to run the Office of the Comptroller of the Currency, likely triggering a contentious Senate confirmation fight over the leadership of a key Wall Street regulator. 

The White House formally announced its plans to nominate Saule Omarova in a Thursday statement, calling the Cornell University Law School professor “one of the country’s leading academic experts on issues related to regulation of systemic risk and structural trends in financial markets.” 

The OCC oversees the U.S.’s biggest lenders, including JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. If cleared by the Senate, Omarova would be expected to take a hard line in both approving new rules and supervising the industry. 

Omarova has made a series of controversial comments during her academic career, including that she wants to “end banking as we know it.” She has also cited the rapid rise of digital tokens as “benefiting mainly the dysfunctional financial system we already have.” She has argued that cryptocurrencies threaten to destabilize the economy and are vulnerable to abuse by private firms at the expense of public safeguards.

Positions Omarova has advocated for, such as moving consumer banking to the Federal Reserve from private institutions, make it unlikely that she will win support from Senate Republicans. Still, Senate Banking Committee Chairman Sherrod Brown, an Ohio Democrat, urged his panel to confirm her. 

She will work to “ensure the economy works for everyone, and to protect our economic recovery from the risky activities of Wall Street and other bad actors,” Brown said in a statement. 

Pennsylvania Senator Pat Toomey, the banking committee’s top Republican, signaled the tough battle ahead by accusing Omarova of holding “extreme leftist ideas” -- including nationalizing retail banking. In a statement, he said he has “serious reservations” about her nomination.

Omarova, who previously worked as a banking lawyer at Davis Polk & Wardwell and served as a special adviser in President George W. Bush’s Treasury Department, likely can’t afford to lose any Democratic support because the party has just a single-vote majority in the Senate. Banks, which are big donors to both political parties, are expected to lobby aggressively against her. 

“Some of those more moderate Democrats in the Senate don’t have this enmity or animus toward banks the way that the progressives do,” said Ian Katz, an analyst at Capital Alpha Partners, a Washington research firm. “The whole thing really comes down to what a small number of Democrats think about her.” 

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