Biden to Tap Crypto, Wall Street Critic Omarova to Run Bank Watchdog

President Biden is set to nominate Saule Omarova, an attorney and Cornell Law School Professor to the position of Comptroller of the Currency within the U.S. Treasury, a watchdog organization that oversees the country’s banks, according an administration insider.

In her academic work, Dr. Omarova has long advocated for the government to take a wider role in providing financial services, questioning whether banking institutions are adequately serving American public.

As Comptroller of the Currency, Dr. Omarova would oversee policing the nation’s largest banks as the head of a central financial regulator. She would also set the rules potentially limiting operations of fintech startups and cryptocurrency companies.

Omarova has written in favor of restructuring the U.S. Federal Reserve System and has recommended that ought to provide bank accounts directly for consumers, which she has opined would make the banking system “less comlicated, more stable and more efficient in serving the long-term needs of Americans.” These views are likely to make her nomination as Comptroller highly controversial, particularly among Senate Republicans, as the GOP has long pushed for deregulation in big business as opposed to greater and more restrictive regulation.

Dr. Omarova has been quoted recently as stating that large banking organizations “hold so much power now and they move so much money through their own channels that it is effectively impossible through just rules and some enforcement to really shape what it is they’re doing or allowed to do.”

She has also expressed skepticism that so-called fintech companies and cryptocurrencies can provide the type of disruptive benefits to consumers that they promise, clearly not buying-into the hype surrounding the innovative new technologies.

Earlier, in 2019, she has said Bitcoin’s rise from an “obscure techno-utopian experiment” to property included in institutional investor portfolios is a “vivid example of how fintech technology can be, and is used to synthesize tradable financial assets effectively out of thin air.” As quoted by Bloomberg, Omarova has described the rise of cryptocurrencies as “benefiting mainly the dysfunctional financial system we already have,” positioning her in the camp of those highly skeptical of the innate value of Crypto, if not deeply philosophically opposed to the digital currencies. 

As for her overarching philosophy about the organization of the U.S. financial system, Omarova says, “What we should be really thinking about is, what should we do to shift that balance and have the Fed and have the Treasury and have maybe other public institutions maybe take a greater part in the infrastructure itself, in the provision of financial services. We need to bring more adults into the room, the adults meaning the public.”

Neither Omarova nor the White House responded to requests for comment on this piece. News of her selection as head of the Office of the Comptroller of the Currency was earlier reported by Bloomberg and the Wall Street Journal.

The scuttlebut about Dr. Omarova emerges as financial observers continue to wait an announcement on whether Biden will reappoint Jerome Powell as chair of the Federal Reserve, another key financial system oversight position.

Dr. Omarova, who originated from Kazakhstan in Eastern Europe, would be the first person of color and the first woman to head the Office of the Comptroller of the Currency (“OCC”) as a permanent appointment. Her upcoming nomination will put to rest the heavy conjecture that has played out since Biden was elected into office over who should get the tap to be comptroller.

Biden’s earlier prime candidate, the former Treasury official Michael Barr, was ultimately not nominated after his consideration sparked heavy resistance from Democrats, who had instead urged Biden to choose Mehrsa Baradaran, another law school professor, for the position. Currently, the OCC is overseen temporarily by Acting Comptroller Michael Hsu, a former official from the Federal Reserve.

Dr. Omarova previously served at the U.S. Treasury Department under President George W. Bush and earlier worked as an attorney with Davis Polk, where she had focused upon corporate transactions and finance regulation advisory work, according to her Cornell University professor’s biographical profile.