WASHINGTON — President Joe Biden's choice to become one of the top banking regulators endured a contentious nomination hearing Thursday, with Republican senators warning she would nationalize the U.S. banking system and Democrats saying she's eminently qualified and would be tough overseer of Wall Street.
Saule Omarova, 55, was nominated in September to be the nation's next head of the Office of the Comptroller of the Currency. If confirmed, she would be the first woman and person of color to run the 158-year-old agency.
Omarova is a long-time academic and well-regarded expert on financial regulation, but many Republicans and the banking industry have taken issue with several papers published during her career where she's proposed wholesale changes to the banking system.
On Thursday, Omarova fielded questions about her academic writings and whether she would have the power to implement those proposals. She was also asked by Republicans whether it was appropriate for banks to not lend to certain industries if they chose, such as the oil and gas industry and gun manufacturers. Democrats focused on blunting the GOP attacks.
"Taken in totality, her ideas do amount to a socialist manifesto for American financial services," said Sen. Pat Toomey of Pennsylvania.
Another Republican senator, referring to Omarova's childhood in the former Soviet Union, said he did not know whether to call her "professor or comrade."
The banking lobby is overwhelmingly against the nomination, with opposition coming from both the big Wall Street institutions and smaller community banks. In an interview with The Associated Press this week, Omarova said their opposition is largely due to fears that she would be a tough regulator for Wall Street and the banks.
During the hearing, Omarova said she would be advocate for smaller banks and keep a close eye on the large banks who tend to outcompete smaller institutions.
"I wish the community bankers and their trade associations actually read more carefully what I have written," Omarova said.
Republicans on the committee focused most of their questioning or statements on Omarova's past writings and public comments.
Last year, she published a paper arguing for an overhaul of the nation's banking system that would expand the Federal Reserve's role by allowing the central bank to hold consumer deposits. Proponents of such a move say the Fed could extend credit more quickly when needed to individual accounts during times of economic downturns. Following the Great Recession, banks hoarded deposits and did little lending to rebuild their balance sheets.