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The Big Picture
After two failed attempts, Biden’s third pick for Comptroller of the Currency, Saule Omarova, is setting the stage for a radical shift in how the federal government regulates banking. A noted radical in financial circles, Omarova is harshly critical of the financial industry at-large, often arguing that the nation's banking system needs to be fundamentally restructured with a particular emphasis on increasing the power of federal regulators.
Omarova’s nomination has drawn the ire of many. For one, she was reportedly nominated “over the objections of Treasury Secretary Janet Yellen,” who staked out a more moderate position on financial regulations both at the Federal Reserve and the Treasury Department. Outside groups are also concerned. The American Bankers Association issued a press release opposing her confirmation, saying her “proposals to effectively nationalize America’s community banks, end regulatory tailoring based on risk and eliminate the dual banking system are particularly troubling.”
Why It Matters
President Biden and his administration have made it clear that they intend to return the federal government to heavy-handed regulation. From the Federal Trade Commission’s Lina Khan to the SEC’s Gary Gensler, President Biden has packed his administration with regulatory hawks that are seeking to use their newfound power to radically alter our financial markets and institutions. Omarova’s nomination is only the latest in a series of such appointments.
In particular, Omarova’s nomination to lead the OCC is worrisome in many of the same ways that similar nominations have been controversial. Omarova’s outspoken opposition to the regulatory status quo -- and the institutions that rely on it -- has led many to wonder whether she can serve as an unbiased regulator. Presuming she is confirmed, only time will tell how far Biden’s OCC is willing to go. Regardless, troublesome changes for the American financial system loom large on the horizon.