We need a comptroller who can draw a line between banking and the rest of the financial industry
President Biden has nominated Saule Omarova to be Comptroller of the Currency. The Office of the Comptroller (OCC) regulates national banks. One of our most venerable financial regulators, the OCC and comptroller date back to 1863, the oldest federal financial regulator. Thanks to this agency, the United States developed a strong federal banking system in the wake of the financial chaos of the 19th century, one that forms the backbone of American banking.
Omarova is the ideal nominee. Banks should support the nomination, too.
Predictably, the non-bank industry and lobbyists have turned their fire on Omarova. The Fintech and Crypto nonbank industry have every reason to fear this nomination. Lobbyists, purporting to represent the banks but, in my view, part of a self-perpetuating industry that sometimes has a greater interest in opposing good choices, claims that Omarova would be bad for banks. Much of the rest of the financial industry, Fintech and Cryptocurrency in particular, seek the carefully defined privileges of national banks without having to observe the many public protections with which banks have to comply.
I have not agreed with everything Omarova has proposed and have sometimes strongly disagreed, but I have always found her to be one of the most incisive and reasonable analysts of bank regulation, its shortcomings — and particularly the value of the bank charter. She has never been afraid to speak truth to power (one of the reasons the lobbyists oppose her). Most importantly, Omarova knows how to draw the line between banking and the rest of the financial industry. The nominee understands these boundaries and the fundamental importance of banking, and she would be the ideal guardian of a structure that preserves boundaries so important to fair competition and financial stability.
In my engagements with Omarova — who is a fellow teacher in the field at Cornell Law School — I have found her constantly thoughtful, always willing to listen to those who disagree, and generally much more accurate in her many analyses of complicated technical issues than many of her colleagues and certainly than many of the partisans. She is a profoundly honest individual who would provide far-reaching leadership to one of our most important offices of state. Her major publications are essential reading for students of the subject.
Bankers and banks, large and small, should recognize Omarova as someone with whom they can engage meaningfully, and someone who would lead fair and honest regulation over them.
Lawrence G. Baxter is the David T. Zhang professor of the practice of law at Duke Law School, faculty director of Duke’s Global Financial Markets Center, chair of Duke’s Advisory Committee on Investor Responsibility and a member of the Regenerative Crisis Response Committee. He was an executive vice president at Wachovia Corporation. Baxter previously worked as a staffer with the Senate Banking Committee when critical legislation was passed after the Savings and Loan Crisis of the 1980s and 1990s.
Editor’s note: This piece has been updated.