Faced with opposition, the candidate of the American banking regulator undertakes to protect small lenders

The US Capitol is seen in Washington, United States, on November 16, 2021. REUTERS / Elizabeth Frantz

WASHINGTON, Nov. 17 (Reuters) – The selection of US President Joe Biden to head one of the country’s leading banking regulators will focus on ensuring a fair and competitive market in which small and medium-sized banks can thrive, according to his testimony prepared by Congress published on Wednesday.

Willow Omarova will appear before the Senate Banking Committee on Thursday to explain why she should be confirmed as Comptroller of the Currency (OCC) despite opposition from banks, Republicans and even some Democrats.

In her testimony, Omarova said she wanted to protect small and medium-sized banks, which have declined in number in recent years, hampering communities’ access to credit.

“Community banks are also forced to compete with big tech companies, like Facebook, which don’t follow the same rules,” she wrote.

A professor at Cornell Law School and a former US Treasury Department official at the onset of the financial crisis in 2007, Omarova has won praise from Progressive Democrats who think she would be tough on Wall Street. She would also be the first woman to head the 3,500-person agency.

But his appointment has met fierce opposition from banks, which say his academic work advocating for the dismantling of large institutions and for the Federal Reserve to provide public bank accounts is anti-capitalist. While candidates can pass a simple majority, Omarova may still struggle to gain enough votes in a divided Senate, Washington insiders have said.

Biden has dropped his first choice for the job, former Treasury official Michael Barr, amid fierce criticism from progressives. If forced to withdraw Omarova’s appointment, she would join Neera Tanden, whose appointment as budget manager was dropped in March, and David Chipman, whose appointment as head of the Bureau of Alcohol, Tobacco, Firearms and Explosives, was retired in September.

“All of my academic work is driven by one desire: how to improve our financial system and financial regulation so that we don’t have a repeat of the 2008 crisis. It’s not about destroying one way or the other. another private banks; it is not anti-free market. Omarova told Reuters in an interview.

“It’s about making sure that our financial system channels credit and capital to the real economy, to businesses that employ real people,” she added.

Born and raised in Kazakhstan, then part of the Soviet Union, Omarova bristled at what she sees as largely personal attacks and “misperceptions of her work,” and said her experience of an oppressive state system had given him an appreciation of American values.

“I lived for years in fear of saying what I thought and … that’s what I really enjoy in America. Being an academic in America gives me the right, and gives me that freedom, to think. things bankers don’t think about because it’s not their job. “

Reporting by Pete Schroeder and Andrea Shalal in Washington Writing by Michelle Price Editing by Bill Berkrot, Matthew Lewis and Shri Navaratnam

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