OCC nominee faces tough questions at Senate hearing

Community bank opposition to Saule Omarova’s nomination to lead the Office of the Comptroller of the Currency took center stage at a contentious Senate Banking Committee hearing.

Background: Omarova—a Cornell University law professor—faced questions following opposition to her nomination from ICBA and 41 affiliated state community banking associations as well as her academic papers and public statements proposing to “end banking as we know it.”

Proposals: Several committee members raised questions about Omarova’s calls for transferring private retail banking functions to the Federal Reserve and fully replacing private bank deposits with FedAccounts.

S. 2155: Senators—including Democrats Jon Tester (Mont.) and Mark Warner (Va.)—also expressed concerns with Omarova’s opposition to the ICBA-advocated S. 2155, a bipartisan 2018 law that enacted significant regulatory relief targeted at community banks.

Response: In her testimony and responses, Omarova said community banks are crucial to extending credit in local communities, and she pledged that community banks would not find a stronger ally—reflecting community banks’ key role at the hearing. However, she did not retract her policy proposals.

Letter: The letter from ICBA and affiliated state groups—which was entered into the record along with more than 60 other letters of opposition—said the industry’s opposition is based on a careful review of Omarova’s published scholarship and public statements, which include positions “alarming to community banks.”

Next Steps: The committee will have to vote to approve Omarova’s nomination before it can go to the full Senate for a confirmation vote, with several Democratic senators expressing concerns alongside universal Republican opposition.