Biden’s pick for bank watchdog pulls out after GOP accusations of communism

President Biden’s pick to lead a top bank regulator withdrew her nomination Tuesday after blistering attacks from Republicans and concerns among moderate Democrats.

Saule Omarova, whom Biden nominated to lead the Office of the Comptroller of the Currency (OCC), pulled herself from consideration in a letter Biden released Tuesday, calling her nomination “untenable.”

“As a strong advocate for consumers and a staunch defender of the safety and soundness of our financial system, Saule would have brought invaluable insight and perspective to our important work on behalf of the American people,” Biden said in a statement.

“But unfortunately, from the very beginning of her nomination, Saule was subjected to inappropriate personal attacks that were far beyond the pale,” Biden added.

Omarova, a Cornell law professor born in the former Soviet Union, faced universal opposition from Republican senators. Though Omarova’s family was nearly eviscerated by the Stalin regime, several Republican senators either suggested or outright accused her of supporting communism.

While most Democratic senators condemned attacks on Omarova’s heritage, several moderates expressed concerns about her proposals in legal papers to shift much of the consumer banking system into the federal government. No Democratic senator publicly opposed her nomination, but at least five reportedly told the White House they were unwilling to support her confirmation.

During her confirmation hearing last month before the Senate Banking Committee, Omarova said those papers were part of a broader academic debate about banking innovation and not an agenda should she be confirmed. As comptroller of the currency, Omarova would have wielded substantial power over national banks but lacked the authority to make the changes outlined in several of her papers.

Even so, moderate Democrats on the Banking panel appeared unconvinced, raising immediate doubts about her viability.

Senate Banking Committee Chairman Sherrod Brown (D-Ohio), who supported Omarova’s confirmation, blasted the nominee’s opponents in a Tuesday statement for waging a “relentless smear campaign reminiscent of red scare McCarthyism.”

“Despite her unquestioned expertise and her bipartisan record, powerful interests distorted Professor Omarova’s views and writings,” Brown said. “I am disappointed that these spurious attacks and misrepresentations of Professor Omarova’s views were not resoundingly rejected in a bipartisan manner.”

Omarova’s withdrawal will now force Biden to find a new nominee for a key regulatory position left unfilled since he took office in January. 

The OCC regulates and supervises national banks to make sure they’re complying with a range of laws meant to promote safety and soundness in the banking system. The agency can levy steep penalties on banks engaged in risky or reckless behavior and impose regulations with only the comptroller’s approval.