Saule Omarova on Tuesday withdrew her nomination to be Treasury’s lead bank regulator, and the White House is portraying her as a victim. The real fault lies with the White House advisers who thought they could push through a nominee for Comptroller of the Currency who loathes the banking system she was going to supervise.
“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...
Advertisement - Scroll to Continue
Saule Omarova on Tuesday withdrew her nomination to be Treasury’s lead bank regulator, and the White House is portraying her as a victim. The real fault lies with the White House advisers who thought they could push through a nominee for Comptroller of the Currency who loathes the banking system she was going to supervise.
“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,” President 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.”
Our editorials were the first to oppose her nomination, but they didn’t challenge her ethics or raise personal issues. We reported what the Cornell law professor believes and what she said she wants for the financial system.
Picking up the White House theme, the New York Times reported Tuesday that, “Some lobbyists, including the incoming chairman of a group representing community bankers and the chief executive of another group that focuses on big banks, also shared a Wall Street Journal editorial suggesting that Ms. Omarova’s Soviet childhood meant that she could not be trusted.”
Childhood? Please. The issue isn’t where she was from but that she hadn’t disavowed her radical views about the U.S. financial system. This included her recent proposal that the Federal Reserve take over consumer bank deposits, “effectively ‘end banking,’ as we know it,” and become “the ultimate public platform for generating, modulating, and allocating financial resources in a modern economy.”
Advertisement - Scroll to Continue
The U.S. doesn’t need a bank regulator who wants to end banking as we know it, or who wants to create a central bank digital currency, as she put it, to “redesign our financial system & turn Fed’s balance sheet into a true ‘People’s Ledger.’”
The White House mistake is that it has subcontracted its financial regulatory personnel choices and agenda to Sen. Elizabeth Warren, who is placing her proteges and allies throughout the government. They’re at agencies like the Securities and Exchange Commission, the Consumer Financial Protection Bureau and Federal Trade Commission. The White House is also considering Richard Cordray, who once ran the consumer bureau, for the Federal Reserve Board of Governors.
In the case of Ms. Omarova, her views were too much even for Senate Democrats, a pack of whom said they couldn’t vote for her. She will fit back in comfortably with the Cornell faculty, but she had no business being handed the power to regulate even a corner of the (still barely) free-market American banking system.