Ds Scholarship

Saule Omarova gets candid: Banks sank her nomination to become a key regulator

Sulli Umarova blamed the banking industry for helping to miss out on her nomination to become one of the country’s top banking regulators, saying they distorted her research, creating an environment in which attacks against her have become unfair and personal.

Umarova gave her comments to NPR morning edition Host Steve Inscape in her first interview since she withdrew her nomination last week to head the Office of the Comptroller of the Currency (OCC), which oversees more than 1,000 US banks.

The Cornell University law professor came under unusual direct attacks from some Republican senators and conservative groups during her candidacy, including outspoken suggestions that Omarova, who was born in the then Soviet Union, held “communist” views.

Omarova, an American citizen, vehemently denied this.

Umarova said she was surprised by the nature of the attacks, saying opponents of her candidacy misclassified and demonized her work.

“The content of my studies has been completely distorted,” Umarova told NPR. “It was actually turned into a caricature.”

“I wasn’t ready for that,” she said of the attacks.

As a university professor, Umarova has proposed influential but unconventional reforms to the US financial system, and advocated reining in speculation by banks while seeking to attract more ordinary people into the banking sector.

Its critics, for example, quoted a recent newspaper, which included a proposal to allow the Federal Reserve to engage in the retail banking business.

Umarova suggested that the central bank could offer bank accounts to ordinary Americans, which would represent a dramatic departure from the way the banking system is currently set up.

In statements opposing Omarova’s nomination, industry groups such as the American Bankers Association (ABA) and Independent Community Bankers of America (ICBA) cited her research, but were careful to avoid personal attacks against her.

But Umarova said opposition from banking advocates has led to an environment in which attacks against her have become personal, including from Senator Pat Toomey, R-B., who she said “was the first to devise this whole line of questioning.”

In a fiery speech in October, Tommy attacked Omarova, saying she was “obviously averse to anything like free market capitalism” while noting that he had “never seen a more radical option for any regulatory place in our federal government.”

During his speech, Tommy suggested that Omarova’s views were shaped by her upbringing.

He said, “You might ask yourself, ‘Where does a person get these ideas from?'” “Well, it might be the contributing factor if someone grew up in the former Soviet Union, went to Moscow State University, and attended there with a Vladimir Lenin Academic Scholarship.”

Amarova was born in the former Soviet Union in what is now Kazakhstan. She studied at Moscow State University before moving to the United States in 1991 to pursue postgraduate studies.

When the Soviet Union disintegrated, Omarova decided to stay in the United States, working in a private law firm and, more recently, as an academic.

Tommy’s office has not yet responded to NPR’s request for comment.

“Professor or companion”

Referring to her opponents in general, Umarova said, “They made a strategic decision that the best chance of defeating me was to generate this…a politicized reaction against me personally. In other words, personally demonic.”

Umarova added that the attacks made her “a caricature… of this evil person, possibly a spy for the Soviet Union, regardless of the fact that this country does not exist.”

“I think this strategy has paid off,” she added.

Umarova said she was particularly incensed by a series of questions about her upbringing from Senator John F. Kennedy, a Republican of Los Angeles, during last month’s Senate nomination hearing.

“I don’t mean any disdain,” Kennedy said at the time. “I don’t know whether to call you ‘Professor’ or ‘Comrade’.”

The comment drew gasps from the audience.

Umarov replied at that time: “I am not a communist.” “I don’t subscribe to this ideology. I can’t choose where I was born.”

About a month later, Omarova remembers what was going through her head at that time.

“I was surprised by it, but also very angry with him,” she said. And at that moment, I thought, ‘Okay, that’s enough.’ “

The Kennedy office also did not respond to NPR’s request for comment.

However, Omarova said that she was not able to personally express her views to many senators, as is customary at hearings. She noted that although she made it clear that she was willing to meet with lawmakers as many times as needed, only one Republican senator, the Republican Senator from Wyoming, Cynthia Loomis, met her.

“It was important for senators to understand what I really support, and not just read bank lobbyists’ cheat sheets about my supposed scientific views,” Omarova said. “The only assumption I can make is that this was their choice not to meet me.”

In a statement to NPR, ICBA said he stood by his opposition to Umarov’s candidacy.

“ICBA and government community banking associations have taken the rare step of publicly opposing – in a detailed letter – a prudential banking regulator candidate due to Professor Umarova’s published scholarship and public statements calling for government allocation of capital and credit, to completely replace private bank deposits, and ”the termination of banking, as we know it”—which will displace community banks, local communities, and small businesses.”

The ABA declined to comment.

Omarofia: Banks have reason to be ‘worried’

Through her interview, Umarova defended her views on the banking sector, saying that her main goal is to ensure that banks focus on helping people and boosting the “real economy” – not making huge profits from speculation.

“In the end, my stances are very simple,” she said. “I believe our financial system needs to do a better job of serving the interests of ordinary Americans and American businesses, the American economy and the real economy.”

She noted that, had it been confirmed, she would have pushed for increased regulation and tougher questions within the powers provided by the OCC.

“They certainly have reasons for concern,” Umarova said of the banking sector.

She said regulators need to ask banks why they invest in certain assets to protect the integrity of the entire financial system.

Umarova argued that doing otherwise might lead to a repeat of the 2008 global financial crisis that required the rescue of major banks.

“We support very importantly their ability to make private profits. So we have the right to ask these questions. We have the right to pressure them all the time about the decisions they make,” she added. “And I think regulators lately have been more permissive and apprehensive about asking banks these kinds of questions.”

They chose to arm my identity

When asked if she believed her opponents were motivated by racism or sexism, Omarova was initially reluctant to answer.

“It’s very difficult to say, you know, whether anyone attacking me is necessarily motivated by racial or sexual motives,” she said, adding that the question puts her “in a losing position.”

“I don’t want to sound like a victim in the process,” she said. But she also added that “the attacks against me were intentionally customized from the start.”

Umarova was keen to notice I don’t think the opposition to the banks was necessarily personal

“Actually, I think the Wall Street lobby doesn’t really care about my race or my gender or anything like that,” she said. “They would have liked me as I am if I only defended their interests.”

“But they chose to weaponize my identity because that was the easiest political way to cement my candidacy. And that’s what they did.”

She said the repercussions extended beyond personal attacks from senators.

“I got a lot of hate messages personally, and it was clear that a lot of those hate messages were using racial slurs and all kinds of insults that I’ve never had in my life,” she said.

“How do I feel about that personally? Can racism, sexism and all these other things, xenophobia, be separated from other things?” She added. “I don’t know. It’s hard.”

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