WASHINGTON–A new candidate for the top job at the Office of the Comptroller of the Currency would likely be a tough critic of the biggest banks, according to one new analysis.
The Biden administration is vetting Saule Omarova, a professor of banking law at Cornell University Law School, to lead the OCC, with the review in its early stages, according to the New York Times. Omarova could be nominated in the coming months or by early next year, sources indicated, after which she would then need Senate confirmation to serve a five-year term.
“Omarova is seen as less controversial than the two previous candidates to lead the agency, which is little known outside the financial industry but has recently gained in importance — especially among Democrats who see banking regulation as a way to address widening racial and economic disparities, both priorities of (President) Biden,” the Times reported.
Omarova, a native of Kazakhstan, was a special adviser for regulatory policy at the Treasury Department under President George W. Bush and, before that, worked five years at the white-shoe law firm Davis Polk & Wardwell.
A ‘Preview’
“Although she has kept a low profile, her academic writings offer a preview of how she might approach the job,” the Times reported. “She has highlighted the growing risks to banks of wading into the cryptocurrency business, which has experienced explosive growth but remains a digital Wild West. Cryptocurrency operations, she has argued, could allow banks to conduct more trading activity out of view of the Federal Reserve and other regulators.
“As comptroller, Ms. Omarova could seek to enhance the O.C.C.’s oversight of such businesses, which banks including JPMorgan Chase and Citigroup are building,” the report added.
The Times noted JPMorgan, the nation’s largest bank by assets, has already introduced its own digital token, JPM Coin. The bank eventually hopes to make the token programable, meaning that rules about when its value can be transferred and redeemed can be written into it.
Regulating Fintechs
“Omarova would probably also take a harder line on regulating financial technology companies, which are increasingly operating in many of the same businesses as traditional banks — such as lending — but with far fewer restrictions, including capital requirements,” the Times stated. “Yet they remain out of the purview of the O.C.C. because they are nonbanks.”
The current acting director of the OCC is Michael Hsu.