[Senate Hearing 117-324]
[From the U.S. Government Publishing Office]


                                                      S. Hrg. 117-324

                     NOMINATION OF SAULE T. OMAROVA

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

                             NOMINATION OF:

    SAULE T. OMAROVA, OF NEW YORK, TO BE COMPTROLLER OF THE CURRENCY

                               __________

                           NOVEMBER 18, 2021

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs
                                
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                


                Available at: https: //www.govinfo.gov /

                                __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
48-204 PDF                 WASHINGTON : 2022                     
          
-----------------------------------------------------------------------------------   
 
            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                       Elisha Tuku, Chief Counsel

                Corey Frayer, Professional Staff Member

                 Dan Sullivan, Republican Chief Counsel

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                    Charles J. Moffat, Hearing Clerk

                                  (ii)

                            C O N T E N T S

                              ----------                              

                      THURSDAY, NOVEMBER 18, 2021

                                                                   Page

Opening statement of Chairman Brown..............................     1
        Prepared statement.......................................    48

Opening statements, comments, or prepared statements of:
    Senator Toomey...............................................     3
        Prepared statement.......................................    49

                                NOMINEE

Saule T. Omarova, of New York, to be Comptroller of the Currency.     6
    Prepared statement...........................................    51
    Biographical sketch of nominee...............................    52
    Responses to written questions of:
        Chairman Brown...........................................    78
        Senator Toomey...........................................    79
        Senator Menendez.........................................    95
        Senator Warner...........................................    96
        Senator Sinema...........................................   100
        Senator Warnock..........................................   101

              Additional Material Supplied for the Record

Letters submitted in opposition to the nomination of Saule T. 
  Omarova........................................................   104

                                 (iii)

 
                     NOMINATION OF SAULE T. OMAROVA

                              ----------                              


                      THURSDAY, NOVEMBER 18, 2021

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 9:30 a.m., via Webex and in room 538, 
Dirksen Senate Office Building, Hon. Sherrod Brown, Chairman of 
the Committee, presiding.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. The Senate Committee on Banking, Housing, 
and Urban Affairs will come to order. We meet today to consider 
the nomination of Saule Omarova to be the Comptroller of the 
Currency. Congratulations to Professor Omarova for being 
nominated to this important role. Welcome to the Committee. 
Welcome to your friends and family watching from home.
    I applaud the Biden administration for this historic 
nomination. Professor Omarova will be the first woman, first 
person of color, and first immigrant to serve as the 
Comptroller of the Currency. She is one of the most qualified 
nominees ever for this job. She is widely regarded as a leading 
expert on banking law and policy. She holds a doctorate from 
the University of Wisconsin at Madison and a law degree from 
Northwestern. She has taught at the University of North 
Carolina--Senator Tillis--at Chapel Hill and at Cornell 
University.
    She has served as a senior advisor to the United States 
Treasury under a Republican administration. She has worked at 
one of New York's most prestigious banking law firms.
    She is an accomplished researcher and writer and has 
published dozens of works on topics critical to our 
understanding of the financial system. More than 70--7-0--
financial regulatory experts from across the political 
spectrum, including, of course, bankers, have endorsed her 
nomination.
    She has testified in Congress many times, before many 
different committees. She has found common ground with Senators 
on both sides of the aisle. I would urge my colleagues to 
review her discussion with Senator McCain for the Permanent 
Subcommittee on Investigations when she testified on physical 
commodities trading and manipulation. Or watch her conversation 
with my friend, Mike Crapo, on data privacy here in the Banking 
and Housing Committee. These are the serious policy 
conversations of a thoughtful, balanced professional.
    Some Republican Senators have decided that this job should 
not go to the most qualified candidate. Despite her 
unquestioned expertise and her bipartisan record, they have 
worked with their powerful friends in this town to degrade this 
confirmation process.
    Just a week after news of her nomination became public, the 
Wall Street Journal ran an op-ed--or maybe more accurately, a 
hit job--on Professor Omarova. They highlighted that she went 
to Moscow State University. They highlighted she received a 
scholarship named after Vladimir Lenin, neglecting to mention 
that pretty much everything in the '60s, '70s, and '80s in the 
Soviet Union was named after Lenin. Besides, there were no 
Milton Friedman or Ronald Reagan scholarships available.
    They made outlandish, unfounded claims based on where she 
grew up. They say she believes the Soviet economic system was 
superior to ours--false. They accused her of wanting to 
establish communist rule over banking here in the United 
States--false again.
    The Wall Street Journal neglected to mention that she 
renounced her communist citizenship and became an American. 
They neglected to mention that she started her family here. 
They neglected to mention the deep ties she has to American 
universities where she studied and worked. They neglected to 
mention her patriotic service to her chosen--her chosen--
country at the United States Department of the Treasury under 
President George W. Bush.
    Escaping communism, moving to America for a better life, 
embracing American values or hard work and public service--what 
could be more American than that?
    Only a few days after the op-ed was published, the Ranking 
Member piled on. He requested that Professor Omarova supply the 
Committee with a paper she had to write as an undergraduate.
    To be clear, this Committee never requires anyone to submit 
unpublished undergraduate work as part of the nominations 
process. I do not remember any nominee who faced a similar 
request, nor do I think that what college kids write is 
generally a good guide for their policy views three decades 
later. So staff, sitting behind me, in both parties, can 
breathe easy. If you aspire to a Presidential nomination, you 
will not need to turn in your sophomore book reports on the 
``The Scarlet Letter''.
    Not only did the Ranking Member request the paper, he put 
out a press release to tell the world that he was requesting 
this paper. He went out of his way to mention the same Lenin 
Scholarship that the Wall Street Journal did. He liberally 
sprinkled the words ``Marx,'' ``Lenin,'' ``Moscow,'' and 
``Russian'' throughout, a total of 12 times, a dozen instances 
of guilt by association. And then he sent another press 
release.
    Since then, he and other Republican Senators have taken to 
the floor to repeat these vile attacks that suggest this 
nominee does not share our American values. They have a 
formula: start with a passing and inaccurate reference to her 
academic work. Distort the substance beyond recognition. Mix in 
words like ``Marx,'' and ``Lenin,'' and ``communism.'' End with 
insinuations about Professor Omarova's loyalties to her chosen 
country. That is how Republicans turn a qualified woman into a 
Marxist boogeyman.
    We know that some people in Washington have been calling 
their political opponents socialists and communists for years. 
I will let Professor Omarova tell her own story but I would 
venture to guess that those words ring a little differently to 
those who have experienced communist oppression first-hand.
    We know that a shadowy political group funded by former 
Trump staff has been fomenting these personal attacks and 
pushing radical right-wing news sites to spread misinformation. 
These inflammatory insinuations continue to stoke the unhinged 
rhetoric that has poisoned our politics. Now we know what 
happens when Trumpism meets McCarthyism. It is a cruelty no 
person should experience.
    Professor Omarova and her family suffered generations of 
oppression under a communist dictatorship. She worked hard, she 
went to the best schools she could in the United States, she 
became an American citizen, she started a family, and spent her 
career to give more Americans the opportunities she was denied 
behind the Iron Curtain.
    That hard work got her where she is today. Just think about 
that. A Khazaki kid growing up in Soviet central Asia. Thirty 
years later she sits before the Senate as the President's 
nominee for Comptroller of the Currency. Imagine that.
    She embodies everything we ought to celebrate, the fighting 
spirit that makes this Nation great. The tenacity to strive for 
a better life. And the openness and opportunity of America that 
attracts the best minds, from all over the world, from every 
kind of backgrounds.
    From growing up in the Soviet Union to escaping to build a 
new life here, to enduring this last month of personal attacks 
with the dignity that she possesses, Professor Omarova has 
demonstrated the strength and independence that she will need 
to be a fair, impartial, and tough Comptroller of the Currency.
    She has both the private industry and the public policy 
experience to prevent a repeat of the financial crisis, a 
crisis that cost millions of Americans their homes and jobs and 
that shuttered hundreds of community banks--hundreds of 
community banks, for whom she has fought.
    The Leadership Conference on Human and Civil Rights, the 
Center for Responsible Lending, the National Urban League, 
Unidos U.S., National Fair Housing Alliance, and National 
Community Reinvestment Coalition, all of these organizations 
have written a letter demanding a stop to these despicable 
attacks, from their organizations, on this nominee.
    I have worked with all of you on the Committee, Republicans 
and Democrats alike, the new Members and the more veteran 
Members. I would hope you all have a sense of decency today and 
moving forward. I expect my colleagues to treat Professor 
Omarova with the dignity and respect she deserves. I ask you to 
listen--to really listen--listen to her words as she shares her 
story, she shares her views about how she will do this job, and 
she shares with us how she wants to serve her fellow Americans.
    Ranking Member Toomey.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thank you, Mr. Chairman. Let me begin by 
acknowledging that Professor Omarova's thesis was certainly 
written a long time ago. The reason it is relevant is because 
it was advertised on her resume up through 2017. I think it 
would be completely relevant to this discussion.
    What apparently some of my Democratic colleagues want to 
really avoid is a full discussion of her policy views, but that 
is what we are going to have this morning.
    Now I have read a variety of Professor Omarova's writings. 
I have watched videos of her speaking. I have absolutely no 
doubt that she is extremely intelligent, very knowledgeable, 
and she is an experienced law professor.
    My concern with Professor Omarova is her long history of 
promoting ideas that she herself describes as, quote, 
``radical,'' end quote. I agree that they are radical, and they 
can fairly be described also as socialist. In fact, I have 
never seen a more radical nominee to be a Federal regulator, 
and I will be using her words.
    Let us talk about some of Professor Omarova's radical 
ideas. For starters, we know she wants to, and I quote, 
``effectively `end banking' as we know it,'' end quote. What 
does that mean? Well, she has told us what that means. In, 
quote, ``The People's Ledger'', that is the name of a paper she 
wrote, she published just last month, she outlined her plan for 
nationalizing retail banking. Under her plan, and I quote, 
``central bank accounts fully replace, rather than uneasily 
coexist with, private bank deposits,'' end quote.
    So in other words, you could not have an account with a 
community bank. Your money would be held by the Government at 
the Federal Reserve.
    Now I remember well countless Pennsylvanians outraged over 
recent Democrat plans for the IRS to get a certain amount of 
personal banking information. Imagine their reaction to having 
the Government actually take over their bank accounts.
    Professor Omarova also has a proposal to control the money 
supply through these individual FedAccounts, as she calls them, 
including, when necessary, and I quote, ``implementing a 
contractionary monetary policy by debiting'' those accounts. 
Now for those of us who are not accountants, debiting means 
basically subtracting. This, she allows, could be, and I quote, 
``perceived as the Government `taking away' people's money,'' 
end quote. Well I think I know why it would be perceived that 
way, because it would be the Government taking away people's 
money.
    Professor Omarova's plan would devastate all banks, but 
especially community banks, because they rely on deposit-taking 
for the lending money to local businesses and residents.
    So what would happen to these banks under Professor 
Omarova's plan to outlaw their business model? Well according 
to ``The People's Ledger'', that she wrote, Professor Omarova 
might allow these community banks to continue to exist but only 
as, quote, ``franchisees,'' end quote, for the Government, if 
they qualify for a license to, quote, ``operate physical 
branches and ATMs on the Fed's behalf,'' end quote. I see.
    Except that Professor Omarova would deny these banks their 
source of funding, which is deposits. And without a source of 
funding, banks cannot very well lend to a woman who wants to 
open a new restaurant in town, a tool and die shop looking to 
expand, or newlyweds who want to buy their first home, or 
pretty much anything else.
    Given that she wants community banks to become vassals of 
the Government, it is no wonder the Independent Community 
Bankers of America and banking associations from 41 States so 
far oppose her nomination.
    As Ricky Leal, Senior Vice President at First Community 
Bank in Texas stated, and I quote, ``The entire theory in 
banking, especially local community banking, is based on 
gathering up deposits from the local community and loaning back 
out into the local community so that those dollars are cycled 
through and stay local. You'd lose all that. A world without 
the local deposit, it would change banking as we know it,'' end 
quote. But, of course, that is the idea.
    Professor Omarova says, again in ``The People's Ledger'' 
that one reason she wants the Fed to become everyone's bank is 
to, and I quote, ``maximize its capacity to channel credit to 
productive uses in the Nation's economy,'' end quote. Now it is 
troubling to ponder how she, or anyone in the Government, would 
define productive uses in our economy. How about loans to oil, 
gas, and coal companies? Would Professor Omarova consider them 
productive? Well, we actually know the answer.
    Earlier this year, at a Social Wealth Seminar she said 
publicly of these energy businesses, and I quote, ``We want 
them to go bankrupt if we want to tackle climate change,'' end 
quote. She also said at an Investment and Decarbonization 
seminar this year, and I quote, ``The way we basically get rid 
of those carbon financers is we starve them of their source of 
capital,'' end quote. And she has created an entire blueprint 
for how the Government could do this, and she has advocated her 
plan, including in testimony to Congress.
    It seems to me the last thing we need now, with some 
Americans paying close to $5 a gallon for gas and home heating 
costs soaring due to the Biden administration's disastrous 
energy policies, is a banking regulator who wants to push 
perfectly legal, and economically necessary, companies that 
employ millions of Americans into bankruptcy.
    But Professor Omarova's radical ideas do not stop there. 
She has a plan for the Government, through the Fed, to replace 
the free market in setting what she calls, and I quote, 
``systemically important prices,'' end quote. But these are 
things she lists. These are things like food, wages, and 
energy. And since the Administration has done a great job on 
inflation, I am sure Americans cannot wait until the Fed starts 
directly controlling prices for eggs, milk, and rent.
    And this is not the only time Professor Omarova has 
expressed support for Government control on wages. As she 
tweeted in 2019, her words, and I quote, ``Say what you will 
about the old U.S.S.R. There was no gender pay gap there. 
Market doesn't always `know best','' end quote.
    I suspect Professor Omarova may claim that as Comptroller 
of the Currency she would not have the power to enact all of 
her radical views. But the truth is the Comptroller is a 
powerful regulator. It wields enormous powers through bank 
chartering, regulation, enforcement, and, especially through 
its opaque supervision process. The Comptroller is also a 
member of the FDIC Board and the Financial Stability Oversight 
Council, America's financial super-regulator.
    Professor Omarova may also claim her writings are just 
thought experiments. But for the last decade, she has been a 
consistent, forceful advocate for these radical ideas in her 
writings, in public statements, and in testimony before 
Congress.
    Now taken in their totality, her ideas do amount to a 
socialist manifesto for American financial services. She wants 
to nationalize the banking system, put in place price controls, 
create a command-and-control economy where the Government 
allocates resources, explicitly, instead of free men and women 
making their own decisions about the goods and services they 
want to buy and sell in an open market.
    These are exactly the kind of socialist ideas that have 
failed everywhere in the world they have been tried. In my 
view, Professor Omarova's policy views are too radical, and 
preserving the prosperity that our free-market economy makes 
possible is too important to make her our Nation's top banking 
regulator.
    So I would like to ask unanimous consent to enter into the 
record letters of opposition to Professor Omarova's nomination 
from 65 industry, taxpayer, advocate, consumer, and women's 
organizations, including the Independent Women's Forum, 
Independent and Community Bankers of America, U.S. Chamber of 
Commerce, National Taxpayer's Union, and banking associations 
from 41 States. I would also like to enter into the record 
letters of opposition from 21 State auditors and treasurers, 
representing 17 States, and the Governor of Texas.
    Thank you, Mr. Chairman.
    Chairman Brown. Without objection, so ordered.
    Thank you, Senator Toomey. Professor, would you rise and 
raise your right hand.
    Do you swear or affirm that the testimony that you are 
about to give is the truth, the whole truth, and nothing but 
the truth, so help you God?
    Ms. Omarova. Yes, I do.
    Chairman Brown. Do you agree to appear and testify before 
any duly constituted committee of the Senate?
    Ms. Omarova. Yes.
    Chairman Brown. Please be seated. Thank you.
    Professor, we welcome you to the Committee. If you would 
like to introduce family members or friends with you today, 
either in person or who are remote, I invite you to do that 
before beginning your testimony. Please begin.
    Thank you.

    TESTIMONY OF SAULE T. OMAROVA, TO BE COMPTROLLER OF THE 
                            CURRENCY

    Ms. Omarova. Chairman Brown, Ranking Member Toomey, Members 
of the Committee, it is a great honor to appear before you 
today. Allow me to begin by thanking President Biden for the 
confidence and trust he placed in me by nominating me to be the 
Comptroller of the Currency. I am deeply honored for another 
opportunity to serve my country, as I did under President 
George W. Bush.
    I would also like to thank my husband, my son, and my 
mother, and all of my many friends for their love and support 
throughout the years.
    I appreciate the time many of the Committee Members have 
taken to meet with me personally, and for those of you who have 
not met me yet, I am happy to have a chance to share with you 
who I am and what I believe in.
    I grew up in an all-women household, under a totalitarian 
regime presiding over a failing economy. My mother, a doctor at 
a local hospital, worked long hours, just to make ends meet. I 
was raised by my grandmother, a soft-spoken woman who was 
orphaned and barely escaped death when, in the 1920s, Stalin 
sent her entire family to Siberia. The crime for which my 
grandmother's family was killed was that they were educated 
Kazakhs who did not join the Party.
    That is why, to me, pursuing education and academic 
excellence was an act of defying political oppression and 
injustice. I studied hard, got into the best university I 
could, and was ultimately able to fulfill my dream of coming to 
America, the land of opportunity and freedom.
    I came to the United States in 1991, with one suitcase and 
a $50 bill in my pocket. I fell in love with this country and 
its people from day one. That was the beginning of my personal 
American dream. I earned a doctorate from the University of 
Wisconsin and a law degree from Northwestern University. I 
practiced banking law at one of the top law firms in New York 
City, and served in the U.S. Treasury under the George W. Bush 
administration.
    These experiences taught me invaluable lessons about how 
financial ``sausage'' is made and how that can lead to 
devastating financial crises. That is why my academic work has 
been focused on safeguarding the stability and resilience of 
our financial system.
    In the 2008 crisis, I saw what happens when powerful market 
players generate excessive risk and leverage outside of 
regulators' view, and then leave the American taxpayer to foot 
the bill when the speculative boom turns bust. We cannot afford 
a repetition of this destructive scenario, especially now, in 
the aftermath of the global pandemic.
    If I am confirmed to lead the Office of the Comptroller of 
the Currency, my top priority will be to guarantee a fair and 
competitive market where small and mid-sized banks that invest 
in their neighbors' homes and small businesses can thrive, and 
where every community, regardless of wealth, geography, or 
history, has access to safe and affordable financial services.
    A critical part of that task is preserving and fostering 
the relationship banking that drives economic growth and 
creates local jobs and prosperity. I am thinking here of my own 
local community bank in Ithaca, New York, Tompkins Trust, where 
they know every one of their customers and care about our 
community's needs. That is what I see as the true heart of 
American banking.
    Today, the community banks that perform the crucial 
function of extending credit to local small businesses and 
hardworking families are disappearing, leaving many urban and 
rural communities without meaningful access to financial 
services. Community banks are also forced to compete with big 
tech companies like Facebook, that do not play by the same 
rules.
    These issues are deeply personal to me. Having grown up in 
an oppressive State-run system, with no free enterprise and no 
economic opportunity, I have a unique appreciation for our 
dynamic and diverse markets. It is what made my life and 
success possible, and for that I am forever grateful. Every 
American family should have the same opportunities that my 
family has had.
    If confirmed by the Senate, I will work to ensure that our 
financial system gives every family the tools they need to 
build their own American Dream. I will pursue this goal 
alongside the committed career professionals at the OCC. I will 
serve the American public with the utmost dedication and 
integrity, and I will do everything in my power to protect and 
strengthen the safe and stable banking system that makes 
America work.
    Thank you, and I look forward to your questions.
    Chairman Brown. Thank you, Professor Omarova. We have seen 
much of your work mischaracterized over the last couple of 
weeks. Just a few questions. Do you want to end banking as we 
know it?
    Ms. Omarova. No, Senator, I do not want to end banking as 
we know it. I believe that our banking system is the best 
banking system in the world, although we could do better.
    This phrase was taken out of the paper that written in the 
context of an ongoing academic debate on the future of digital 
money, central bank digital currencies and stablecoins. As you 
know, according to Fed Chairman Powell, the Fed is currently 
considering issuing the digital dollar. China is already 
piloting its digital yuan. Facebook is piloting its Diem. 
Whether to digitize the U.S. dollar and how to do it is 
entirely up to Congress and the Federal Reserve.
    Writing as an academic, I was simply trying to grapple with 
what that might look like. My worry is that if we take this 
step without fully understanding the implications of it we may 
hurt community banks and mid-sized banks that would experience 
the flight of business of banking to bigger players, like big 
tech companies and Wall Street platform-based financial 
institutions.
    So I have never said that this particular proposal, or the 
Fed accounts, is the best solution that Congress should take, 
or the only solution that Congress should consider, only that 
it might be one of the options Congress should consider.
    Chairman Brown. Thank you. One of the striking things to me 
about your writings is your support of community banks, in a 
whole host of different ways. Let's talk about some of the 
other issues that have been brought up. Natural gas is a big 
industry in Ohio. Energy jobs are important in my neighbor 
State, in the Ranking Member's State. News reports have 
highlighted you saying you want to bankrupt oil and gas 
companies. Do you want to do that?
    Ms. Omarova. No, Senator, absolutely not. That was poor 
phrasing--I admit to it. I do understand that energy companies 
are very important part of our American economy. Millions of 
Americans work in the energy sector. But in recent years we 
have seen many instances where especially smaller energy 
companies have experienced hard time, and even went bankrupt, 
leaving workers with nowhere to go.
    So what I was actually saying in that particular 
presentation is that we need to think collectively about 
finding new ways of helping workers in this sector to 
transition to higher-paying jobs if we are looking into the 
future and the rise of new technologies.
    Chairman Brown. Thank you. I want to ask you about the 
personal attacks that you face, unprecedented as far as I have 
seen, to a nominee in front of this Committee. Your biggest 
critics cannot help but mention you were born in the Soviet 
Union and attended University of Moscow. When did you become an 
American citizen?
    Ms. Omarova. I became an American citizen in 2005, and 
immediately after that I renounced my Kazakhstan citizenship.
    Chairman Brown. Do you have any loyalties to any communist 
parties or any Marxist or Leninist ideas?
    Ms. Omarova. No, I do not. I absolutely do not. I have 
lived through that regime. I have lived through that system. I 
have absolutely no affection or affiliation with any of those 
ideas.
    Chairman Brown. And some of your family members, before you 
were born, but some of your family members were murdered by 
that regime. Correct?
    Ms. Omarova. That is correct. I come from the people who 
have been oppressed under the Soviet regime, lost probably a 
quarter of its population to its efforts to sedentarise nomadic 
Kazakhs. My own family has suffered persecution. So yes, that 
is absolutely correct.
    Chairman Brown. Thank you for your candor. I hope the rest 
of this hearing will be focused on what is really at stake--
American families, the financial system. And just this last 
question. What is your vision for the job the President has 
nominated you for, as Comptroller of the Currency?
    Ms. Omarova. Senator, if I am confirmed to be the 
Comptroller of the Currency I will do my best to uphold the 
mission of the OCC, which is to safeguard the safe and stable 
and competitive operation of the national banking system. I 
would do my best to ensure that every American family, every 
American business, every American community has access to 
credit.
    Chairman Brown. Thank you. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. Professor Omarova, 
in your article, which was published in a law review journal 
last month, which is entitled ``The People's Ledger''--that is 
the title--and you did advocate nationalizing the business of 
retail banking. In your words, and I quote, ``The article 
outlines a series of structural reforms that would radically 
redefine the role of a central bank as the ultimate public 
platform for generating, modulating, and allocating financial 
resources in a democratic economy, the People's Ledger,'' end 
quote.
    You also said this article, accordingly, advocates full 
migration of demand deposits onto the Fed's balance sheet. This 
is meant to create a system--that is a quote, right. ``This 
article, accordingly, advocates full migration of demand 
deposits onto the Fed's balance sheet,'' end quote.
    According to your article, and I quote, ``The proposed 
reform will effectively `end banking'.'' You put ``end 
banking'' in quotes, but this is all your quote. ``The proposed 
reform will effectively `end banking' as we know it.''
    These are all direct quotes. This is not my 
characterization. Do you stand by these policy proposals that 
you published last month?
    Ms. Omarova. Senator, thank you for your question. So let 
me give a little bit of the context about this particular 
paper.
    Senator Toomey. I have got very little time so please be 
very succinct. I have more questions.
    Ms. Omarova. Of course. Of course, Senator. So as I said, 
this paper was written in the context of an ongoing academic 
debate on how to approach digitizing the dollar, because this 
seems to be an inevitable solution. The paper seeks to address 
the implications of that step for the entire financial system. 
The particular phrase that has attracted so much attention was 
actually my quoting a title, the title of a book that somebody 
else wrote about fintech effectively ending banking. My concern 
is----
    Senator Toomey. The phrase that is more interesting--not 
interesting but disturbing--to me is not ``necessarily ending 
banking as we know it,'' although that is exactly what would 
happen, but it is your phrase in which, and I will quote again, 
``This article, accordingly, advocates full migration of demand 
deposits onto the balance sheet.''
    I read a lot of this paper, and it is clear to me that you 
were not referring exclusively to a central bank digital 
currency. You were talking about all demand deposits going to 
the Federal Reserve. Now are you now saying you are no longer 
for that?
    Ms. Omarova. Senator, what I am trying to clarify here is 
the problem this paper was trying to solve. The problem this 
paper is trying to solve was the fact that if we allow 
digitization of currency and the issuance of central bank 
digital currency without thinking through its implications, 
community banks and mid-sized banks will be put inherently in a 
losing position.
    Senator Toomey. But Professor Omarova, you have advocated 
that they lose all their deposits, and then you acknowledge 
that that means they would not have the resources to lend 
money. And so you have constructed this whole mechanism whereby 
they could go to the Fed and get funding to make the loans, 
provided that they made loans in a fashion that the Fed 
approved of. That is the short version.
    Let me go on to another quote, because this is right from 
that very same article published last month. You said, and I 
quote, ``In principle, Fed accounts can be made available as an 
alternative to bank deposit accounts upon a person's request. 
As explained below, however, the more effective option would be 
to transition all deposits to the Fed.'' That sounds pretty 
straightforward. When you use words like ``advocate,'' and you 
talk about the proposal, and you talk about a preferred option, 
it sounds like that is what you are for. Are you no longer for 
those things?
    Ms. Omarova. Senator, being a legal academic there is a 
particular way we write our idea. Unlike economists, for 
example, we cannot simply claim it is an assumption and there 
is a model.
    So having said that, I just want to clarify, my job as an 
academic was to expand the boundaries of the academic debate 
and outline potential options for Congress to consider. This is 
entirely up to Congress whether or not to go that route.
    Senator Toomey. Sure. Of course. Ultimately. But this is 
what you recommended, and it does not seem to be a coincidence 
that every one of these thought experiments or academic ideas, 
every one of them involved dramatic expansion in the power and 
control of the central Government to allocate resources, to 
control banking, and a corresponding diminution in the freedom 
of individual Americans and institutions. That is the common 
theme that comes up again and again and again. You use words 
like ``advocate,'' ``your preference.'' I mean, to suggest now 
that, well, maybe you are not really for these things, it is 
just hard to believe this.
    We will have more time in the second round. But I want to 
underscore, the powers of the Comptroller of the Currency are 
enormous, powers to decide who gets to open a bank account and 
who does not. What kind of loans can and cannot be offered. The 
opportunity to exercise a radical ideology through the powers 
of the Comptroller of the Currency are chilling.
    Thank you, Mr. Chairman.
    Chairman Brown. Senator Reed, from Rhode Island, is 
recognized.
    Senator Reed. Thank you very much, Mr. Chairman, and I want 
to join the Chairman in recognizing the skill and the insights 
and the preparation of Dr. Omarova. She is qualified for this 
position. I too am disturbed by the personal attacks. They are 
a diversion, really, from the issues that we have to raise, and 
I hope we can raise here, because they are serious.
    Dr. Omarova has seen the banking system from about every 
angle you can think of, from a prestigious New York City law 
firm, in which I assume, Doctor, you represented banks. Is that 
correct?
    Ms. Omarova. Yes. Yes, we have represented some of the 
biggest financial institutions.
    Senator Reed. Yes, and they were, I am sure, very pleased 
with your representation on their behalf.
    Ms. Omarova. I believe so.
    Senator Reed. And then also with the George W. Bush 
administration, and I do not think--I do not know former 
President Bush that well, but I do not think he was in the 
habit of appointing Marxists, socialists, Leninists to public 
office. So that, I think, is another aspect of this.
    And just a comment. And I will commend the Ranking Member. 
I think his comments and his questions are very insightful. But 
one of the things I think the banking industry does with 
regularity is if they do not like provisions in a particular 
regulator they change their charters. There are so many 
community banks that are State chartered, that are not governed 
by the Comptroller of the Currency, and as also indicated, too, 
any type of significant change would require statutory--would 
require this Congress to agree.
    The articles that have been discussed, and you, I think, 
tried to put them in context, is we face an extraordinary shift 
with respect to digital currencies, with respect to all of 
these factors, and there is a possibility, because they are 
virtually unregulated now, that private companies, unrelated to 
the Federal Reserve, could start essentially setting our 
monetary policy. Is that the context of your academic pursuits?
    Ms. Omarova. Yes, Senator. You are absolutely correct. This 
is exactly the context for my academic pursuits, particularly 
with respect to the digital currency and potential options we, 
or Congress, might take in this direction.
    My concern is that digitization of the dollar would give an 
inherent and unerodable structural advantage to large players 
like Facebook and other big tech companies. So whether or not 
community banks survive depends on what you Senators decide to 
do to protect them.
    My academic work was driven purely by the desire to give 
you a greater range of options, potential alternatives to 
consider. Like I said, I do not presume that any of the 
proposals I have made is the only proposal or the best proposal 
you should consider.
    Senator Reed. Now we are in the midst of the revelations 
about Facebook's operating procedures, et cetera, and it is 
quite possible, given the current context of laws, not just in 
the United States but internationally, that Facebook basically 
could design a digital currency, could operate to the extent 
that it is so much in use--in fact, I think Tesla for a while 
was experimenting with using digital currency to buy cars--that 
the U.S. dollar becomes something that cannot be used to 
regulate our economy. And also, by the way, national banks 
would, and local banks would essentially say, ``I don't need a 
Federal charter. I just have to get a franchise from 
Facebook.'' Is that not right?
    Ms. Omarova. That is absolutely correct. This is the scary 
scenario that I think everybody should take seriously these 
days.
    Senator Reed. You know, the irony here is, you know, we 
faced this same dilemma with respect to social media, et 
cetera, going back 10, 15 years, and this Congress really was 
not provoked to think through it. We just sort of sat there and 
said, ``Here. Whatever you want. Take it.'' And guess what? 
They have taken it, and now we are facing this crisis, actually 
an institutional democratic crisis, of what controls must we 
put on these algorithms, et cetera. And if we lose the power--
and I think this is why you want to get us to think hard--if 
the Federal Reserve loses monetary power to regulate this 
economy then we are in very difficult circumstances.
    Ms. Omarova. Thank you, Senator. I think you have 
summarized my work probably better than I did. Thank you.
    Chairman Brown. Thank you, Senator Reed. Senator Shelby, 
from Alabama, is recognized.
    Senator Shelby. Thank you, Mr. Chairman. Mr. Chairman, I 
would like to associate first my--be associated with the 
remarks of Senator Toomey. He raised a lot of important 
questions here before the Committee today about the nominee. I 
think he is spot on. I have all those reservations, but I have 
a couple of questions I would like to propound to the lady.
    First of all, I have always thought that economic analysis 
has served an important role in ensuring regulations, that 
regulations in the banking and financial field are efficient 
and convenient, consistent to--you know, regulations mean 
things. They have got to be fair. Well, a lot of years here on 
the Banking Committee, and this is my 35th year on the Banking 
Committee here. Administrations of both political parties, 
Democrats and Republicans, have worked to improve and to 
further utilize economic analysis in the regulatory process, to 
try to get it right.
    You have been critical of the use of economic theory and 
empirical data as the basis for financial regulation, but that 
is what we do. In a paper that you wrote in February of 2020, 
just a little over a year ago, you rejected the idea that good 
financial regulation is, quote, ``carefully limited, facially 
objective, politically neutral, and technically expertise.'' Do 
you still believe, Doctor, do you believe that carefully 
limited, objective and neutral regulations are bad for our 
financial system?
    Ms. Omarova. Senator, first of all thank you for this 
question.
    Senator Shelby. Uh-huh.
    Ms. Omarova. I actually believe that you and I share a lot 
of the same ideas with respect to what should underlie 
regulatory policy. I agree with you that the economic analysis 
and reliance on empirical data are absolutely critical to smart 
decisionmaking by the regulators.
    This particular paper was a little bit different in what I 
was trying to do. What I was trying to do was think about how 
the financial regulators need to change their way of thinking, 
to broaden their way of thinking now, that we are not dealing 
with regular old stock certificates written on paper but we are 
dealing with digital assets. We are dealing with financial 
technologies that make financial transactions instantaneous. It 
changes the context in which financial regulators have to do 
their jobs.
    My view of the job, particularly of the Comptroller of the 
Currency, is to prevent the next crisis. It is to make our 
banking system safe, sound, strong, and competitive. And in the 
new context of how technology changes finance, what I was 
trying to tell my academic fellow and regulators is that we 
need to start maybe broadening our horizons.
    Senator Shelby. Do you still disagree with using economic 
theory and empirical data for the basis of financial 
regulations?
    Ms. Omarova. Senator, I do not disagree with that and have 
never disagreed with that, so I believe that I completely 
understand where you are coming from.
    Senator Shelby. Do you believe that our banking system is 
the glue that helps hold our market economy together?
    Ms. Omarova. Senator, I am so glad you asked me this 
question because it gives me an opportunity to redirect. I 
absolutely believe that our American banking system, private 
banks that channel credit into businesses, families, 
communities is absolutely critical to our American economy, and 
we need to do everything in our power to make sure that that 
system stays strong, competitive, and is subject to the rules 
of the free and fair market. This is not just an issue of 
economic progress. It is an issue of national security these 
days.
    Senator Shelby. Do you believe that the community banks, 
our smaller, independent banks all over this country contribute 
greatly to our economic well-being and job creation process?
    Ms. Omarova. Senator, I absolutely believe in that, and I 
agree with that. I will never forget, if I may, when I came to 
American in 1991, I will never forget the first time I opened a 
checking account at the University of Wisconsin Credit Union, 
and holding that checkbook in my hand was the symbol of 
economic autonomy and freedom. And I would not want people of 
America to lose that.
    Senator Shelby. Some of your testimony here today is in 
contrast to a lot of your published writings, and that is 
troubling to me. I am troubled by your nomination. I know you 
have got a great story, personally, and you are academically 
qualified. I understand that. But I do not think you fit in 
this job. I would hope that they nominate you for some other 
job that you would probably be more qualified for. I cannot 
support you for Comptroller of the Currency.
    Thank you, Mr. Chairman.
    Chairman Brown. Senator Menendez, from New Jersey, is 
recognized.
    Senator Menendez. Thank you, Mr. Chairman. Dr. Omarova, a 
lot has been said about your background. Let me ask you, my 
understanding is that your grandmother was orphaned because 
Stalin sent her entire family to Siberia and they died there. 
Is that true?
    Ms. Omarova. That is absolutely true.
    Senator Menendez. And what did that teach you about the 
communist system?
    Ms. Omarova. What that taught me about the communist system 
is that is oppressive, it does not care about human beings, and 
it kills its own citizens, for no other reason but refusal to 
follow what an oppressive State Government ideology tells them 
to do.
    What that taught me also is that in that system you do what 
you have to do to survive, so you can fight against it. I chose 
to come to this country, I chose to become a U.S. citizen, and 
in everything I do, no matter how people may interpret my 
academic work, my one goal is to make this country better and 
stronger so we can never have a reputation of that communist 
system anywhere in the world.
    Senator Menendez. Yeah, I think only when, as my parents 
came from a communist system, only when you live in such a 
system can you understand what is necessary to survive. But you 
seek to ultimately revolt against it in every way you can, and 
those have different manifestations to it. It also teaches us 
that under such a system, freedom of thought, academic thought, 
is not something that is truly free. Is that true?
    Ms. Omarova. That is absolutely true.
    Senator Menendez. And so when you are pursuing academic 
thought it is a question of exploring out of the box. It does 
not necessarily mean that such thoughts are, at the end of the 
day, the pragmatic thoughts that you would put into place if 
you had the power to do so.
    Ms. Omarova. Senator, you are absolutely correct. I have 
lived for many years in a system where I was afraid to speak my 
mind. Everybody was afraid to speak my mind. Academic freedom, 
freedom of thought, freedom of speech are something that I 
value incredibly deeply and personally in this country.
    Senator Menendez. Let me ask you something that would be 
specific to your job. The Community Reinvestment Act is an 
important civil rights law. I hope upon your confirmation that 
you will work on a revamped CRA rule that will deal with some 
of the challenges we have with minority, small and mid-sized 
business owners' lack of access to credit, a problem 
particularly evidenced in minority communities hit 
disproportionately hard by the pandemic.
    What changes do you think the OCC should implement to 
ensure that banks, through the CRA, are better serving minority 
businesses?
    Ms. Omarova. So thank you, Senator. I agree with you that 
the Community Reinvestment Act is a critical civil rights era 
law, and I am glad that financial regulators, banking 
regulators, including the current Acting Comptroller of the 
Currency, are working together on modernizing the framework, 
for assessing the performance of our banks with respect to 
channeling credit into low- and moderate-income communities, 
communities of color, rural areas, and other current banking 
deserts.
    If confirmed as the Comptroller, I intend to take the CRA 
performance and the implementation of the newly revamped rule 
very seriously. The OCC's primary toolkit is, of course, 
supervision, and I would want to talk to the professionals at 
the OCC about what they see as the key issues on the ground 
that stand in the way of making sure that our banks fulfill 
their CRA duties properly.
    Senator Menendez. And then finally, I think maybe some 
within the financial institutions who oppose your nomination is 
because you are not from the same old-boy system, and, 
therefore, are concerned about how you might ultimately 
regulate. There have been some of the biggest, high-profile 
scandals in banks, like Wells Fargo. These scandals not only 
cause direct harm to consumers, they erode trust in the 
financial system, and the old-boy system seems to have let them 
do exactly that.
    If confirmed, how would you improve oversight of large 
financial institutions to prevent such scandals and risk, as 
these that have been talked about, and do you believe that when 
examiners are embedded in financial institutions they run the 
risk of becoming too familiar with the institution they 
regulate, resulting in regulatory capture?
    Ms. Omarova. Yes. Thank you so much for your question. I 
think it is a very important issue. I have deep respect for 
bank examiners at the OCC and other banking agencies. I realize 
how hard their job is. But I also understand that allowing 
particularly large financial institutions to repeatedly commit 
fraud and hurt their customers seriously undermines the trust 
and confidence in our banking system, and I think it is the job 
of a fair and impartial regulator that stands in the shoes of 
the American public to enforce the laws as they are written and 
to make sure that they use all the tools in their toolkit to 
ensure that such things do not happen anymore.
    Chairman Brown. Thank you, Senator Menendez. Senator Crapo, 
from Idaho, is recognized for 5 minutes.
    Senator Crapo. Thank you, Mr. Chairman, and Professor 
Omarova, as has been reviewed today, you have written on 
numerous topics and have frequently used the word ``radical'' 
to describe your own policy ideas. You have advocated for 
policies that would remake our entire financial system, such as 
advocating for Government allocation of capital and credit 
through transfer of banking functions to the Federal Reserve, 
fully replacing private bank deposits, and in your own words, 
support policies that would effectively end banking as we know 
it. It is not surprising that the Independent Community Bankers 
of America have urged opposition to your nomination.
    Under your People's Ledger proposal, for example, community 
banks would be relegated to serving as representative offices 
of the Federal Reserve. Today, of course, they fund their 
balance sheets and lending operations primarily through FDI-
insured deposits. The People's Ledger would make community 
banks almost wholly dependent on the Federal Reserve for 
funding through the discount window, and this funding would be 
contingent on the extension of, quote, ``qualified,'' end 
quote, loans in accordance with specified underwriting and 
other eligibility criteria.
    This could easily lead to the politicization of credit 
allocation, which is what I understand you advocate. This 
proposal is an anathema to community banks and our free market 
system. The core mission of community banks is support for 
small business and their households based on their knowledge 
and their borrowers and their communities. As recently as in 
March of 2021, you said that we want certain of these 
disfavored industries to go away and we want them to go 
bankrupt if we want to tackle climate change.
    Today you said you did not mean that phrase, but later, in 
May of that same year, you proceeded to call for the debanking 
of these industries, saying the way we basically get rid of 
these carbon financers is we starve them of their source of 
capital. Furthermore, you have proposed allowing the Government 
to block credit to what you have called socially suboptimal 
industries. From your writings we know that that includes the 
carbon industry, but I take issue with these statements, and I 
just do not believe that we should be encouraging our financial 
institutions, or directing our financial institutions to 
bankrupt industries for political purposes. Let's not forget 
that the idea of controlling the allocation of capital is not 
new.
    In a recent Administration, we had a project called 
Operation Chokepoint, which sought to do exactly this. This 
time, one of its targets was the firearms industry. They were 
targeted by the Federal Government and the regulators and 
restricted in their ability to access banking services. 
Operation Chokepoint was real and it exceeded its legal limits.
    Professor, given your statements, how can we be confident 
that you will not pursue such radical actions as the head of 
the OCC and literally seek to starve legal and lawful 
industries of capital simply because they are viewed as 
politically unfavorable?
    Ms. Omarova. Senator, thank you for asking this question 
because it gives me a chance to provide some context and 
clarify my statements. I am not sure that is a correct 
characterization of whatever I said about the oil and gas 
companies as calling for debanking. It was not made in the 
context of what banks should or should not do.
    I believe in private allocation of capital, and I believe 
in the fact that it should be banks making decisions to which 
company to lend and on what conditions, subject to the 
regulatory and supervisory requirements that they do it 
prudently. And the OCC's job is not to meddle into specific 
decisions on credit allocation on the ground, and as a 
regulator, if I am confirmed, I fully intend to follow the 
rules and the law as it is written.
    The OCC's job is simply to ensure that when banks make 
those decisions that they fully identify, understand, and 
account for the risks they are taking, and that is my position.
    Senator Crapo. Well, you have just highlighted the point 
that I make. It has been suggested here that you cannot achieve 
your objectives without Congress' approval, but under Operation 
Chokepoint and other efforts that we have seen through the 
regulatory agencies, their power of supervision can be used 
without Congress' permission to allocate capital. And I just 
have a great concern.
    Do you believe that the firearms industry is a socially 
suboptimal industry?
    Ms. Omarova. Senator, I do not think much of firearm 
industries. I believe that if I am confirmed as the Comptroller 
of the Currency my job will be simply to make sure that all 
national banks are safe and sound and they have taken into 
account all the risk factors when they decide to lend to one 
business or another business. That is not going to be up to me.
    Senator Crapo. My time has expired but let me just say, 
that is exactly the argument that was made under Operation 
Chokepoint, that we can evaluate the risk of these socially 
suboptimal industries and through our supervisory power drive 
them out of their source of capital, and that is an incredibly 
dangerous concept for us to be building into our system.
    Chairman Brown. Thank you, Senator Crapo. Senator Tester, 
from Montana, is recognized.
    Senator Tester. Yeah. Thank you, Chairman Brown, Ranking 
Member Toomey, and thank you for being here today, Professor. I 
appreciate you putting yourself out there. I will tell you, I 
have been disappointed by comments criticizing where the 
nominee was born, where she grew up, what her education was, 
going after her heritage. I think we really need to focus on 
her ideas, and there should be no place for that.
    Professor Omarova, I appreciate meeting with you earlier 
this week, and you have a compelling story. I am sorry that you 
had to face what I see as unfair and unacceptable attacks.
    I do, however, have some significant concerns about 
positions that you have taken, including as a witness before 
this Banking Committee related to our financial system, bank 
regulation, and on legislation related to the OCC.
    In my office we discussed your opposition to a bill that I 
helped write, the Economic Growth, Regulatory Relief, and 
Consumer Protection Act, which was signed into law back in 
2018. You have described it as dismantling and weakening 
regulation and supervision. The OCC is responsible for 
enforcing, implementing, and overseeing provision of this 
statute.
    So what specifically did you oppose about my bipartisan 
legislation?
    Ms. Omarova. Thank you, Senator, for this question. I 
testified in connection with S.2155 to express my deep concern 
about inadvertently loosening the regulatory oversight of the 
largest financial institutions that engage in high-risk trading 
operations that do not necessarily follow the traditional 
relational banking model. However, as I said in my testimony, I 
was fully supportive, and I remain fully supportive, of 
tailoring regulatory requirements and lightening the regulatory 
burden on community banks and smaller banks that do not engage 
in such activity.
    Senator Tester. Thank you for that. What do you consider a 
big bank?
    Ms. Omarova. It is difficult to say in terms of the 
specific bright line asset size. I know that now it is the law 
of the land that anything below $250 billion is not considered 
a systemically important financial institution.
    Senator Tester. Do you agree with that?
    Ms. Omarova. I agree with that, yes.
    Senator Tester. OK. So you think big banks are the ones 
over $250 billion?
    Ms. Omarova. I believe that a bank that has $2 trillion in 
assets, that is a big bank.
    Senator Tester. And do you believe that S.2155 helped those 
banks? A yes or no would work. A yes or no would work. I heard 
you say earlier that you thought it helped the big banks.
    Ms. Omarova. Yes. I think indirectly it might have helped 
the big banks.
    Senator Tester. OK. This has been hit before on this 
Committee but I want to touch on it again. You have written 
that the private sector does not allocate capital well and that 
private capital allocation causes destabilization. Do you think 
that your National Investment Authority would do a better job 
at this?
    Ms. Omarova. The National Investment Authority proposal is 
meant not to supplant or replace private allocation of capital 
but to supplement it and provide an additional set of 
investment opportunities for private capital in the kinds of 
projects that naturally and rationally do not get funded in 
private markets because of their high risk or long term to 
profitability.
    Senator Tester. So it is to supplement, not to supplant.
    Ms. Omarova. Yes.
    Senator Tester. Although, and this was brought up by 
Senator Crapo and others earlier, in a recorded event earlier 
you said you wanted small coal, oil, and gas companies to go 
bankrupt to combat climate change. The challenge here is that 
in my real life I farm. I am a small family farmer in eastern 
Montana. There could be somebody in a position that would say, 
``You know what? The big guys are far more efficient. They do a 
much better job. Our food security would be better served if 
you went out of business.''
    Now there are arguments for that. I can make arguments on 
the other side, by the way, and damn good ones. Do you see how 
risky that is to make that statement?
    Ms. Omarova. I am sorry, Senator.
    Senator Tester. That statement about taking certain 
industries and saying, ``You know what? I believe this so we 
need to do it.''
    Ms. Omarova. Right.
    Senator Tester. With one person making that potential 
decision, and you are a one--we have oversight but you are a 
one-man shop, do you see how dangerous that could be?
    Ms. Omarova. Senator, I do not intend to advocate that kind 
of a position. That particular statement about oil and gas 
companies going bankrupt, as I said, that was taken out of 
context, and I actually misspoke. That was not well framed. My 
intention was actually saying exactly the opposite, that we 
need to help those companies to get restructured.
    Senator Tester. Thank you for being here. We have 
additional questions for the record. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Tester. Senator Scott, 
from South Carolina, is recognized.
    Senator Scott. Thank you, Mr. Chairman. I do want to note 
that not a single Republican on this Committee has mentioned 
anything other than your position related to your nomination. I 
keep hearing my friends on the other side refer to personal 
attacks. One thing I can say, and can be very proud of on this 
Committee, from these Republicans, not a single person has 
talked about anything other than your stated positions as it 
relates to this nomination. So any suggestions otherwise is 
simply hogwash.
    I want to be fair, and I will be fair. I will not be 
hyperbolic, but I will be frank and honest. I cannot think of a 
nominee more poorly suited to be the Comptroller of the 
Currency, based solely on your public positions, statements, 
and the weight of your writings than you are.
    Let me just quote you versus anybody else. On the Green New 
Deal Champion you proposed taking economic and climate 
policymaking from Congress and creating an unaccountable 
bureaucracy called the National Investment Authority. In a 
roundtable this year--this year--you pushed to make the NIA the 
dedicated institutional platform at the Federal level for 
really being the kind of fighting muscle of the Green New Deal 
and fighting muscle of, you know, all of these other movements 
that pursuing environmental justice, social, economic justice, 
equality, and so on.
    Your disdain for the financial services industry. In 2019, 
in a documentary titled--I will be kind--``Buttholes: A 
Theory'', you said, ``The financial services industry, in my 
view, and I don't think I am alone here, is the quintessential 
butthole industry.''
    Killing American energy. In Jain Family Institute seminar 
in March of this year you proposed bankrupting the coal and oil 
and gas industries, saying, ``We want them to go bankrupt if we 
want to tackle the climate change.'' That is really hard to 
misunderstand.
    On nationalizing banking, last year, 2020, not 10 years 
ago, not 20 years ago, just last year, a paper you titled ``The 
People's Ledger: How to Democratize Money and Finance the 
Economy'', you proposed reforms to, and I quote, ``effectively 
end banking as we know it by nationalizing''--the quote you 
have was ``effectively ending banking as we know it.'' How? By 
nationalizing retail banking. As it relates to the end of 
private banking. Your words. No one else's. This year. Not 5 
years ago. Not 10 years ago. Not 20 years ago.
    This year you said you proposed to imagine what it would be 
like if, instead of just a public option for deposit banking, 
instead of just a public option for deposit banking this would 
be actually the full transition. In other words, there would be 
no more private bank deposit accounts, and all of the deposit 
accounts would be held directly at the Fed.
    I want to say that one more time, because this is what 
really, among all the other comments, is quite disturbing. This 
is a not a position that you took years ago. This is something 
that you spoke to this year. And I quote, ``Imagine what it 
would be like if instead of just a public option for deposit 
banking this would be actually the full transition. In other 
words, there would be no more private bank deposit accounts, 
and all of the deposit accounts will be held directly at the 
Fed.''
    I do not have any questions for you because there is 
nothing you can say today to undo what you said for years, 
including this year.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Scott. Senator Warner, 
of Virginia, is recognized from his office.
    Secretary Warner. Thank you, Mr. Chairman, and Dr. Omarova, 
it is good to see you, at least remotely, and I very much 
enjoyed our meeting, and I am impressed by your intellect and 
your background and your American success story.
    I have to say, I join my friend, Senator Tester, though. I 
am pretty disappointed in your views on Senate bill 2155, of 
which I was proud to be one of the authors as well, a bill, 
that I would remind you, got 69 votes. And as somebody who was 
very involved in the Dodd-Frank legislation, where I think we 
put appropriate restrictions on some of the largest 
institutions, I think 2155 helped our smaller institutions, the 
mid-sized to smaller regional banks.
    I can assure you that some of the larger regional banks, 
even one located in my State, are still bitterly disappointed 
with me because it did not extend the kind of protections to 
the larger institutions. So I would very much disagree with 
your characterization of that bill, and I would point out again 
it is hard to get 69 votes on anything in the U.S. Senate, and 
I think it was a good piece of legislation.
    As you may know, I have spent a lot of time, at least in 
the last couple of years, in light of the COVID crisis, working 
on the incredibly important role of CDFIs and MDIs. I think we 
saw, in the 2021 CDFI survey that a whole lot of low- and 
moderate-income folks went to CDFIs because they were the only 
institutes of last resort.
    What more could the Comptroller's Office do to encourage 
larger banks to support CDFI sector in terms of their greatest 
needs, things like capital liquidity and technical assistance?
    Ms. Omarova. Yes. Thank you, Senator. First, let me just 
reiterate again that S.2155 has done a tremendous job of 
lowering the regulatory burden on smaller community banks, and 
I think it is a great thing. If confirmed as the Comptroller, I 
will fully uphold the congressional intent and make sure that 
that law is implemented as intended. It actually is not at all 
incongruent with my views.
    With respect to CDFIs and MDIs, again I am really glad you 
brought that up, because community development, and especially 
channeling of the credit to minority-owned businesses, who feel 
clearly more comfortable and more likely to get a loan by going 
to an MDI or a CDFI is a very important priority for the 
Comptroller of the Currency. If confirmed, I intend to make 
support for those institutions one of my biggest priorities. We 
really need to make sure that American families and American 
communities that were hit so hard by this pandemic really have 
fair access to credit and capital that they need in order to 
rebuild our economy.
    So thank you so much for bringing it up, and, of course, if 
I am confirmed I will be happy to work with you and your office 
on how to implement that goal in practice.
    Secretary Warner. Dr. Omarova, thank you for that answer. I 
want to move to another piece of the job, the management of the 
OCC--3,500 employees, 90 offices, oversight of 1,200 banks. I 
think we have seen, with the constant turnover at the OCC, some 
real management challenges. How do we make sure that we keep up 
both recruitment and retention of highly qualified examiners, 
particularly in terms of FinCEN, something this Committee, 
again, the Chairman and Senator Crapo and I and others worked 
on?
    How do we make sure we do that, and how do we make sure, as 
we get into this last minute, too often the OCC has been about 
box-checking rather than actual oversight? So speak to how you 
would address some of the management challenges, retention of 
examiners, and trying to change this culture from, you know, 
simply checking the box oversight to actual meaningful review 
of the institutions you would have oversight over.
    Ms. Omarova. Yes. Thank you, Senator. I think you put your 
finger right on the most important issue for the Comptroller of 
the Currency as the head of a large and very complex agency. I 
have learned, in my years of practicing law on Wall Street and 
working in the Treasury that it is important not to come into 
an agency or any big organization and start doing things 
without first talking to the people in the building.
    So the first thing I intend to do is to really speak to the 
supervisory personnel at the OCC, and perhaps even a listening 
tour of the regional offices in order to understand what needs 
to be done in order to address the concern you have raised, 
which I fully share. Thank you.
    Secretary Warner. I will have some more questions again on 
follow-up on this management issue, but thank you, Mr. 
Chairman.
    Chairman Brown. Thank you, Senator Warner. Senator Rounds 
is recognized, from South Dakota.
    Senator Rounds. Thank you, Mr. Chairman. I have been 
listening to the comments so far, Professor, Dr. Omarova, and I 
am just curious. I have a very difficult time in recognizing 
the appropriateness of you to be placed in this position, but I 
also want to give you an opportunity to respond to some things. 
And I would like to just point out, I come from South Dakota 
where we have got 67 community banks. They have 393 different 
branches. I think Senator Crapo touched on it a little bit, but 
I would like to expand.
    How would you justify removing the critical relationship 
between banks and their communities that has allowed for 
decades of locally sponsored economic growth, other than your 
belief that the Government seems to always know best? And by 
that I mean it would appear that you believe, that you advocate 
for a full migration of demand deposits onto the Fed's balance 
sheet. It would seem to me that in a classroom you would have a 
very lively discussion with members of your class, and I 
suspect that would be entertaining. But I am really challenged 
to see how that could be put into and that you would be trusted 
to be the person responsible for the management, or at least 
the oversight of these different banks.
    And I would like to give you at least a little bit of time 
here to explain that process.
    Ms. Omarova. Well, Senator, thank you very much for this 
question. I find it difficult to explain what is a complex 
piece of academic work in simple, you know, buzzwords, if you 
will. But I want to make one thing clear. I believe in the 
American banking system. I believe in the community banking 
system. I do not think that whatever Congress decides to do 
with respect to digital dollar or Fed accounts, whether or not 
Congress chooses to go that route, whatever Congress chooses I 
think it is absolutely critical to make sure that community 
banks and their role in the provision of financial services, is 
preserved.
    My fear is that that role is being eroded, and it has been 
an ongoing trend for the last 25, 30 years.
    Senator Rounds. Let me just--because I want to hit on a 
couple of other items real quick. Look, I know that we are not 
professors up here, but you would be responsible for working 
with bankers across the entire United States, and you clearly 
have scared the heck out of them. They have been doing business 
for hundreds of years and they have modified based upon the 
directions of regulators, but a regulator who suggests 
significant changes in what has been a successful opportunity 
to provide consumers with lots of credit opportunities, in a 
growing economy, seems to me to be a real challenge for them to 
accept and one that they prefer not to.
    I do have a question, though, with regard to, you discussed 
what would be I guess described as suboptimal social 
businesses, socially suboptimal activities of businesses. But I 
do not think we have had the opportunity to ask you what it is 
that you view as socially suboptimal activities. There are a 
lot of activities clearly that you think that have been 
financed that you would do your best to stop from being 
financed. Is that what this means? And what is a socially--give 
us an example of a socially suboptimal activity.
    Ms. Omarova. Well, Senator, again, thank you for the 
opportunity to sort of answer this question, perhaps clarify 
some of my positions. I fully understand the difference between 
being an academic and being a regulator, and working with 
bankers and working with all other constituencies on making 
sure that our banking system really channels credit into the 
productive enterprise, meaning nonspeculative, actual 
businesses, small businesses, large businesses, in various 
areas.
    And it is not the job of the OCC to decide which specific 
business should or should not get a specific loan from a 
specific bank. I have never advocated that, and I believe that 
it is up to Congress----
    Senator Rounds. With all due respect, in ``The People's 
Ledger'', which is your work, on page 1272 of the paper, you 
write that in that new role the Fed would impose activity 
limitations on lenders in order to direct credit to productive 
enterprise as opposed to socially suboptimal speculative 
activities. Now that would suggest the work of a regulator, and 
that, to me, seems to be moving in the wrong direction.
    Ms. Omarova. Senator, this is the banking law we already 
have in place. We do have the Bank Holding Company Act that 
imposes limitations on the activities that bank holding 
companies, conglomerates engage in, and that act is being 
administered by the Federal Reserve.
    Senator Rounds. But as a regulator--now my time has 
expired, but just please, and I will ask one more time because 
you have not had the opportunity. What is a socially suboptimal 
activity?
    Ms. Omarova. This is not up to the regulator to decide. 
This is a policy decision for Congress. Congress constantly 
often--often--makes decisions with respect to what kind of 
activities we want to promote and what kind of activities we do 
not want to promote. For example, money laundering, terrorist 
financing. On the one hand, one could say these are legitimate 
business activities, but Congress made a decision, many times 
over, that those activities are suboptimal from our social 
safety and public policy perspectives.
    So as the regulator I will not ever step in the shoes of 
either the private entities or Congress with respect to making 
those decisions.
    Senator Rounds. My time has expired. Thank you.
    Chairman Brown. Thank you, Senator Rounds. Senator Smith, 
from Minnesota, is recognized for 5 minutes.
    Senator Smith. Thank you, Chair Brown and Ranking Member 
Toomey, and Dr. Omarova, thank you so much for your willingness 
to serve. I am grateful for you stepping up, even in these most 
divisive of times. And in our conversations and in my reading 
of your work and qualifications I have been wholly impressed.
    We had a chance to talk a little bit about community 
banking when we met virtually, so I want to follow up on that 
conversation. And I told you that my grandmother, Avis Iden 
Mason, who was born in 1898, was a community banker. Her father 
started the bank and he was blessed with three daughters and no 
sons, and so my grandmother and her two sisters ran that bank.
    And I remember, dearly and clearly, going to visit her and 
understanding the role that that bank played, because my 
grandmother and her sisters knew their customers and they knew 
their communities. Those folks were more than just an entry on 
a spreadsheet or a data bit in an algorithm. They were their 
neighbors.
    And I have to say also, Dr. Omarova, I bet that my 
grandmother would have had a thing or two to say about what it 
is like for women to lead in the banking sector, even back in 
the '40s and '50s and '60s.
    In Minnesota, we rank third in the Nation, actually, in the 
number of community banks. They are critical to our State, 
especially in the small towns and rural places that big banks 
often do not serve. And there have been a lot of statements 
made about your position on community banking, where you stand 
on this. Could you just talk to us about how you see the role 
of community banks in our financial system, and if you are 
confirmed describe how you will approach your role when it 
comes to regulatory community banks.
    Ms. Omarova. That is right. Thank you so much, Senator, for 
this question. I believe that community banks are absolutely 
the backbone of our American banking system. They are the 
backbone of that system because they channel credit into real 
businesses, small businesses, into real communities, their 
neighbors, effectively, and that is how they generate local 
jobs and support economic growth.
    Community banks is not about just the size. It is about the 
nature of their business. They lend. They do not run complex, 
risky trading operations. And, therefore, I believe that they 
should be subject to a much more reasonable, tailored 
regulatory oversight than, for example, large, complex 
financial institutions that run trading operations in addition 
to lending.
    And if I am confirmed as the Comptroller of the Currency I 
fully intend to have an absolutely open-door policy for all the 
banks, of all sizes and all risk profiles. But my special 
priority would be to protect, preserve, and strengthen the 
ability of community banks to do what they do best.
    Senator Smith. Thank you. So in Minnesota and across the 
country community banks are getting gobbled up by big banks and 
by bigger financial institutions. In fact, my grandmother's 
bank was bought up years ago. And I am concerned about big 
banks and these voracious big tech companies that are 
increasingly squeezing out community banks that are so 
important.
    So, Dr. Omarova, could you talk about that dynamic that we 
see in the financial sector right now, and as Comptroller of 
the Currency how do you see your role in ensuring that there is 
a level playing field for community banks in a world where big 
banks and big tech are elbowing in?
    Ms. Omarova. Yes. Thank you, Senator. This is a very 
important problem right now because, of course, the 
technological advances, they favor large institutions that have 
the resources and expertise and the capability to build huge 
technological platforms and basically take business away from 
community banks and drive them out of the business.
    I think it is critical to ensure level playing fields that 
would protect the relational banking model from being 
decimated. And if I am confirmed as the Comptroller of the 
Currency, I would make sure that we do everything we can to 
facility community banks' ability to innovate responsibly, to 
join the technological progress without being gobbled up by 
those companies that actually do not play by the same rules and 
therefore have a greater advantage.
    Senator Smith. Thank you very much. You know, Dr. Omarova, 
I think that one of the reasons that the Wall Street banks are 
fighting so hard against your nomination is because they are 
afraid that you will be a regulator who is capable and 
committed of holding them accountable and putting consumers 
first. And, you know, for too long, let's be honest, for too 
long the OCC has had comptrollers who were very chummy with the 
big banks and who have let bad actors go with just a slap on 
the wrist. I mean, the stories, there are so many examples.
    In 2018, JPMorgan Chase reported charged 170,000 customers 
wrong overdraft fees. And what did the OCC do? Well, JPMorgan 
got away without paying a dime in fees. Since 2017, the OCC has 
found at least six banks wrongly charged overdrafts, and in 
each case the agency basically put a note in their file rather 
than pushing for real consequences. And who this hurts are the 
people that are targeted by this kind of behavior.
    So if big banks are worried about your nomination I think 
it is because they are worried that you are going to be 
independent, because you will put the interest of consumers 
first, because you understand how banking works, and you know 
how to hold them accountable. And that is exactly the kind of 
Comptroller that I want to see at the OCC.
    Thank you, Mr. Chair.
    Chairman Brown. Thanks, Senator Smith. Senator Kennedy, 
from Louisiana, is recognized for 5 minutes.
    Senator Kennedy. Good morning, Professor.
    Ms. Omarova. Good morning.
    Senator Kennedy. You used to be a member of a group called 
the Young Communists, did you not?
    Ms. Omarova. Senator, are you referring to my membership in 
the youth communist organization while I was growing up in the 
Soviet Union?
    Senator Kennedy. I do not know. I wanted to ask you that 
question.
    Ms. Omarova. Well, Senator, I----
    Senator Kennedy. There was a group called the Young 
Communists, and you were a member. Is that right?
    Ms. Omarova. I am not exactly sure which group you are 
referring to.
    Senator Kennedy. Well, the formal name of it is the 
Leninist Communist Young Union of the Russian Federation, and 
it is also known as the Leninist Komsomol of the Russian 
Federation, and it is commonly referred to as the Young 
Communists. Were you a member?
    Ms. Omarova. Senator, I was born and grew up in the Soviet 
Union.
    Senator Kennedy. Yes, ma'am. But were you a member of that 
organization?
    Ms. Omarova. Everybody in that country was a member of the 
Komsomol, which was the communist youth organization, because 
that was----
    Senator Kennedy. So you were a member?
    Ms. Omarova. ----that was a part of normal progress in 
school.
    Senator Kennedy. Have you resigned?
    Ms. Omarova. From the----
    Senator Kennedy. From the Young Communists?
    Ms. Omarova. You grow out of it with age, automatically.
    Senator Kennedy. Did you send them a letter, though, 
resigning?
    Ms. Omarova. Senator, this was many, many years ago. As far 
as I remember how the Soviet Union worked was at a certain age 
you automatically stopped being a member of that group.
    Senator Kennedy. Well, could you look at your records and 
see if you can find a copy of your----
    Chairman Brown. Senator Kennedy, I do not interrupt. I 
almost never interrupt these, but----
    Senator Kennedy. Well, you always interrupt me, Mr. 
Chairman.
    Chairman Brown. No, I do not.
    Senator Kennedy. I want to pursue----
    Chairman Brown. No, she renounced her Soviet citizenship.
    Senator Kennedy. Well, I understand that, but you are not 
the witness. She is. Would you look at your records and see if 
you can find a letter of resignation for me?
    Ms. Omarova. Senator, as I explained, I was part of the 
Soviet population----
    Senator Kennedy. Yes, ma'am. I got that part. I just wanted 
to see if you could look at your records and see if you find a 
letter of resignation.
    Let me tell you what. I have spent a lot of time on your 
record and here is what I found. Look, this is America. You can 
believe what you want, but we cannot just let anybody be 
Comptroller of the Currency.
    You wrote your thesis in college at Moscow State University 
on--the title was ``Karl Marx's Economic Analysis and the 
Theory of Revolution in the Capital''. But you will not send 
Senator Toomey a copy. You studied at university, at Moscow 
State University, scientific communism, which is the science 
regarding the working-class struggle and the socialist agenda.
    In 2019, not 30 years ago, in a Canadian documentary, you 
called the financial services industry, quote, ``a 
quintessential asshole industry.'' You wrote a paper called 
``Systemically Significant Prices'', calling for the Federal 
Government to set wages, food, gas prices.
    In 2020, you wrote a paper called ``The People's Ledger'', 
where you said we need to abolish bank accounts and make 
everybody set up an account at the Fed, where the Federal 
Government will have access to your data.
    In 2020, you wrote another paper called ``The Climate Case 
for a National Investment Authority'', where you said what we 
need to do with the oil and gas industry is have the Federal 
Government bankrupt them so we can tackle climate change.
    In 2019, you joined the Facebook group, a Marxist Facebook 
group, to discuss socialist and anticapitalist views.
    Now that is what I see from your record, and you have the 
right to believe every one of these things. You do. This is 
America. But I do not mean any disrespect. I do not know 
whether to call you professor or comrade.
    Ms. Omarova. Senator, I am not a communist. I do not 
subscribe to that ideology. I could not choose where I was 
born. I do not remember joining any Facebook group that 
subscribes to that ideology. I would never knowingly join any 
such group. There is no record of me ever actually 
participating in any Marxist or communist discussions of any 
kind.
    My family suffered under the communist regime. I grew up 
without knowing half of my family. My grandmother herself 
escaped death twice under the Stalin regime. This is what is 
seared in my mind. That is who I am. I remember that history. I 
came to this country. I am proud to be an American, and this is 
why I am here today, Senator. I am here today because I am 
ready for public service.
    Chairman Brown. Thank you, Professor. I checked with my 
staff. Senator Kennedy, I have never interrupted you or, they 
believe, anybody----
    Senator Kennedy. Well, that is not true, Mr. Chairman, and 
I am entitled to ask my questions.
    Chairman Brown. And you were. You were.
    Senator Kennedy. I did not interrupt you when you gave your 
introduction, and I do not like being interrupted when I am 
asking my questions.
    Chairman Brown. Senator Kennedy, I heard----
    Senator Kennedy. It is called senatorial courtesy.
    Chairman Brown. I understand that, and there is also 
senatorial courtesy----
    Senator Kennedy. And you may disagree with me. That is why 
you have 5 minutes and I have 5 minutes.
    Chairman Brown. Senator Kennedy, senatorial courtesy is 
also not doing character assassination. I heard Senator Scott--
--
    Senator Kennedy. Well, that is your opinion.
    Chairman Brown. ----30 minutes ago----
    Senator Kennedy. That is not my opinion.
    Chairman Brown. ----30 minutes ago I heard Senator Scott--
--
    Senator Kennedy. I disagree with you, but I am entitled to 
ask questions without you interrupting me. You and I do not 
agree. I still like you. We are friends. You have the right to 
your opinion but I have got the right to mine, and you cannot 
just interrupt me when I am asking my questions----
    Chairman Brown. You have still got the full 5 minutes.
    Senator Kennedy. ----if you do not like my questions.
    Chairman Brown. You have still got a full 5 minutes.
    Senator Kennedy. And you have done it before.
    Chairman Brown. Senator Scott, just a moment ago, said 
nobody on his side has done any kind of communist insinuation 
of her character and her background. He just said that, so I am 
hopeful that Senator Scott and maybe perhaps Senator Tillis or 
Senator Toomey or Senator Cramer will call out those people 
that do character assassinations.
    Senator Kennedy. Well, do you not think they are relevant 
that she was a member of the Young Communists?
    Chairman Brown. I am not here to answer your questions, 
Senator Kennedy. Senator Warren is recognized for 5 minutes, 
from Massachusetts.
    Senator Warren. Thank you, Mr. Chairman. Professor Omarova, 
I know that the giant banks object to your willingness to 
enforce the law to keep our system safe and that you may cut 
into big bank profits. So they, and their Republican buddies, 
have declared war on you. The attacks on your nomination have 
been vicious and personal. We have just seen them. Sexism, 
racism, pages straight out of Joe McCarthy's 1950s red scare 
tactics. It is all there, on full display. Welcome to 
Washington in 2021.
    Now one claim is that you intend to nationalize the banking 
system, so let's just get this nonsense out of the way. Does 
the OCC have the power to end private banking and to move all 
consumer deposits to a public ledger?
    Ms. Omarova. Absolutely not.
    Senator Warren. If the OCC did have that power, is that 
something you would support?
    Ms. Omarova. Absolutely not.
    Senator Warren. And are you a capitalist who believes in 
free markets?
    Ms. Omarova. Yes, I am.
    Senator Warren. So, great. Now that we have put that on the 
record, I would like to get to the real reason that your 
nomination has generated such fierce opposition, and I think it 
lies in what the OCC does have the power to do.
    Professor Omarova, the OCC oversees a mix of giant banks 
and smaller community banks. Now the giant banks are 
flourishing and growing larger by the day, and big tech 
companies like Facebook are trying to move in, while many of 
the smaller banks are getting wiped out. As Comptroller, how 
would you support community banks and ensure that they can 
continue to provide strong service to their customers and 
competition in the banking industry?
    Ms. Omarova. Thank you, Senator. If confirmed as the 
Comptroller I would make one of my priorities to take a much 
closer look and subject a much closer scrutiny to the ongoing 
trend of consolidation in the banking industry that leaves many 
communities without meaningful access to banking services on 
the ground.
    Senator Warren. Well, you know, part of supporting 
community banks' role in our economy involves a level playing 
field with their larger peers, and that means accountability 
for those big banks. So, Professor Omarova, when a giant bank 
like Wells Fargo repeatedly breaks the law and cheats its 
customers, what do you believe our banking regulators should 
do?
    Ms. Omarova. I believe that banking regulators should use 
the tools in their toolkit to make sure that no bank, small or 
especially large, gets away with repeated violations of the 
law, especially when that hurts real families and real 
businesses on the ground. I think the fines should have real 
bit. I think that executive compensation should be on the line 
for the big banks that continuously and repeatedly violate 
laws.
    Senator Warren. Whoa, Professor Omarova, I think I know why 
you are being attacked so viciously. These banks want to avoid 
accountability, and they certainly want to avoid personal 
liability for their executives, and they are willing to do 
whatever it takes to block you.
    Opposition to Professor Omarova has nothing to do with her 
qualifications or her ability to do this job. Professor Omarova 
will be an honest cop on the beat. She will not grovel before 
powerful banks and big tech companies.
    This is a vicious smear campaign, coordinated by 
Republicans who are doing the bidding of giant banks that want 
to keep gobbling up smaller competitors, want to keep ripping 
off their customers, and want to keep getting away with it. 
Wall Street feels threatened so they have launched an ugly, 
personal assault on a respected person who never sought the 
spotlight. It is disgusting, and anyone who participates in 
this malicious character assassination should be ashamed of 
themselves.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Warren. Senator Tillis, 
from North Carolina, is recognized.
    Senator Tillis. Thank you, Mr. Chairman. Dr. Omarova, thank 
you for being here. I had planned to spend my entire time 
providing, or giving some questions. I probably will get to 
some of the questions that Senators Warner and Tester did on 
the Senate bill 2155. But in light of comments made, even by 
the prior Senator, Members of this Committee, and certain 
members of the press, I want to make a few things crystal 
clear.
    Republican concerns with this nominee are directly tied 
solely to your extensive written record, period, full stop. 
With the exception of some of the comments that my friend and 
colleague, Senator Kennedy made, I think that we have tried to 
focus on what we believe are legitimate policy differences and 
maybe academic differences.
    But an article that ran yesterday in the New York Magazine 
claims that any opposition--and it has been said in this 
Committee--to Dr. Omarova is modern-day McCarthyism. It is 
telling of the journalistic quality of the article, which 
purports to explain Republican opposition to you, that it only 
quotes Omarova supporters while failing to include a single 
interview on the record or a comment from a Republican Member 
of this Committee regarding our actual views.
    Comments and/or innuendo made in the article, and even in 
this hearing today, simply implies concerns with Dr. Omarova's 
nomination are due to--and I have to say, Dr. Omarova, you have 
said it yourself--to being an immigrant, a woman, and a 
minority, which I think are categorically false. I have hired 
women. I have hired immigrants. I have hired minorities, people 
of different gender identities, and I believe that many of my 
colleagues really reject that premise.
    Chairman Brown is reportedly livid that Republicans wish to 
ask about your written record and world view, saying it is 
remarkable that we have stooped so low. I think it is 
remarkable that Members of this Committee are now chastised by 
the Chair for expressing concerns over ideas repeated, in 
numerous papers written by Dr. Omarova.
    The New York Magazine does get one thing right. It notes 
that the FDIC Chair, Jelena McWilliams, a female immigrant who 
came to the United States from then-communist Yugoslavia, did 
not face questioning about her upbringing in a communist State 
during her nomination. I have no intention of doing that 
either, nor have most of the Members of this Committee. That is 
because nothing in Chair McWilliams' prior career, speeches, 
policy writings indicated she would bring a central planning, 
technocratic world view to her position, as we infer from some 
of your writings and public statements.
    Dr. Omarova, on the other hand, has an extensive written 
record in that vein. I appreciate the New York Magazine's 
article helping clarify that point.
    As I did with Chair McWilliams, I will solely consider the 
content of your qualifications, your career, and your written 
records, and should Dr. Omarova feel that bipartisan 
reservations with her record, expressed by sitting Senators on 
both sides of the aisle, are truly in her being an immigrant, a 
woman, and a minority, do you believe that to be the basis for 
any of the questions that have been ask of you today?
    Ms. Omarova. Well, Senator, I am a woman, I am a minority, 
and I am an immigrant. That is who I am. I cannot speak to 
anyone's personal reasons or professional reasons to attack me.
    Senator Tillis. But you have at least said it once that 
perhaps that was our motivation, but I think you would be hard 
pressed to find any evidence today of that being the motivation 
of someone who may be concerned with your view, your academic 
writings, some of which you have said were just academic 
thoughtware, not necessarily something you wanted to put into 
practice. But I just do not see any basis for the so-called 
McCarthyism and the bias that Members of this Committee have 
suggested is our motivation.
    I am going to go real quick. I am going to go to a second 
round. I do have a question about your thesis. I know that the 
Ranking Member asked for your thesis about 7 weeks ago. It was 
not provided. It was not provided as of the deadline. It has 
been included on your resume since 2017. You said you forgot 
about it the day after you wrote it. But why is it that you 
have not responded to this Committee and only recently said 
that it is because you can no longer find it?
    Ms. Omarova. So this was an undergraduate paper I wrote 
about 32, 33 years ago, in a system where there was absolutely 
no academic freedom. We had to write what we had to write in 
order to get our diplomas. It did not reflect my views then. It 
does not reflect my views now. I never thought that it would be 
such an important thing, 33 years later.
    So when I, in 1991, was packing my one suitcase to come to 
America it simply did not even occur to me to look up some 
typewritten version of some mandatorily assigned paper. So I 
did not bring it with me. It was never published. It was never 
meant to be published.
    Senator Tillis. Mr. Chair, just as a brief comment, for 
somebody who has lost family members in the time that she was 
young, for somebody who was growing up in Russia, I would think 
that some of the decisions that Dr. Omarova may have made back 
in the time had as much to do with survival as anything else. 
And so I do not have any concern with where she came from. You 
cannot pick where you were born, and you chose the greatest 
Nation on earth to become a citizen.
    My concerns are not with her background. I believe she did 
what so many people in the Soviet Union had to do to survive. 
But I have grave concerns with the policy positions and the 
idea that someone in such a powerful role could carry those 
forward and ultimately make them something that I believe could 
destroy the banking institutions in the United States. And I 
will be around for a second round.
    Chairman Brown. Thank you, Senator Tillis. The Committee, 
there is a stop time of noon, so we will play this out and hope 
we get to that.
    I understand what you just said. Before calling on Senator 
Ossoff I want to make clear the point of reference that you 
made about that paper. The Committee only requires that 
nominees provide published writings. That has been the 
Committee's practices for the 14 years I have been here, 13 
years, or 14 years, and even Senator Shelby's, I think, for 30 
years. She provided the Committee with the required paperwork, 
and then some. She did everything we required, 60 published 
writings, 120 speeches, 50 public statements.
    I am not here to defend that. I am here to point out that 
she did everything we asked, and the practice of the Committee 
has not been that in the past, and will not be.
    Senator Ossoff is recognized, from Georgia, for 5 minutes.
    Senator Ossoff. Thank you, Mr. Chairman. Dr. Omarova, 
congratulations on your nomination, and thank you for meeting 
with me several weeks ago to discuss your world view and your 
priorities, should you be confirmed.
    My first question for you is can you please comment on the 
implications for fiat currencies of the latest developments in 
financial technology such as, for example, the proliferation 
and evolution of cryptocurrency technology?
    Ms. Omarova. Yes. Thank you, Senator, for asking this very 
complex and very important question. I believe that now we are 
in the midst of a transformational period when the new 
technology has allowed the rise of digital currencies, 
particularly privately issued currencies, that offer a lot of 
potential benefits from the perspective of efficiency, of 
payments, for example, efficiency of transactions in financial 
system, potentially increasing the level of financial inclusion 
because it is so easy and much cheaper now to transact in 
digital assets and digital currencies.
    All of that aside, it does raise a lot of issues with 
respect to the ability of our Nation to maintain the dominant 
status of the U.S. dollar in the global economy, because the 
reason why we have been, so far, able to maintain that status, 
in addition to us, Americans, having the most dynamic and 
diverse and strong economy in the world, has been the fact that 
the Federal Reserve has been able to maintain sort of the value 
of the dollar and to maintain the money supply in the economy 
so that our economy can thrive.
    And my concern is--and it is not only my concern but the 
concern of a lot of academics--is that in the system where a 
lot of private actors, particularly big private actors, like 
Facebook, for example, can issue their own version of currency 
that can potentially outpace and even misplace the U.S. dollar, 
that could have implications far beyond what we typically 
consider in the banking regulatory sphere, but it might 
undermine our monetary sovereignty and the value of the dollar.
    Senator Ossoff. Thank you. And what would be the 
implications, in your view, for monetary policymakers of the 
emergence of such privately issued digital currencies that were 
able to function effectively as media of exchange and stores of 
value?
    Ms. Omarova. Right. So currently all the central bankers 
and many policymakers around the world are actively and 
intensely debating precisely that question that you have 
raised, Senator. And there are different options, potential 
options, that different countries and different sets of 
policymakers might prefer. Congress could choose to regulate, 
for example, privately issued stablecoins that can compete with 
the official sovereign money, or Congress, or policymakers, 
could choose to enable the central bank, the Federal Reserve, 
to issue digital dollar, central bank digital currency, and 
make those decisions as they go.
    Senator Ossoff. And what, in your view, would be the 
potential utility of such a central bank digital currency, and 
how would it differ in its functionality and its implications 
for how capital markets and commerce unfold in the United 
States and around the world from traditional cash?
    Ms. Omarova. So, Senator, central bank digital currency, 
like any digital currency, would make a couple of things easier 
to achieve in the financial system than they are today. One is 
the efficiency of moving money around, and that is very 
important because the efficiency of payments, the efficiency of 
transactions is an incredible risk-reducing tool in the 
financial system. The other thing is access. With a new 
technology, and particularly the issuance of CBDC or any other 
private stablecoins, it is much easier to enable everybody to 
have access to money.
    The one potential advantage of CBDC over private 
stablecoins is that it will be issued subject to statutory 
mandate, legal decisions made by democratically elected 
lawmakers like yourselves, and so that would allow the central 
bank, under the oversight of Congress, for example, or other 
legislature, to ensure that everybody has fair access to the 
new form of money.
    Senator Ossoff. Thank you for your testimony. 
Congratulations again on your nomination, and, Mr. Chairman, I 
yield back.
    Chairman Brown. Thank you. Senator Hagerty, from Tennessee, 
is recognized for 5 minutes.
    Senator Hagerty. Thank you, Mr. Chairman. Dr. Omarova, you 
spent your career coming up with proposals that are designed to 
radically transform America's financial sector, even though 
America's financial markets are the envy of the free world. So 
your nomination to a senior Government role underscores that 
President Biden and the Democrats are driving America full 
speed down the collapse road toward socialism.
    I have some basic questions to ask you, Dr. Omarova. Do you 
accept the basic economic principles of supply and demand? A 
yes-or-no answer will be fine.
    Ms. Omarova. Yes, I do.
    Senator Hagerty. Thank you. In general, when something 
costs more, all else being equal, do people tend to buy less of 
it? Again, a yes-or-no answer would be fine.
    Ms. Omarova. It is hard to tell.
    Senator Hagerty. When something costs more, all else being 
equal, do people tend to buy less of it?
    Ms. Omarova. If it is something without which you cannot 
survive, or if your child needs it, you are going to pay 
whatever you have to pay.
    Senator Hagerty. I think that the design of the 
Administration here is pretty clear. When President Biden was 
elected, regular gas cost an average across the United States 
of $2.10 a gallon. Now the price has been driven up to $3.40 a 
gallon, on average, across the United States, and in many 
places it is much more expensive, and those prices are rising, 
again, putting pressure on people's ability to purchase 
gasoline, to purchase fuel.
    Dr. Omarova, do you think that higher gas prices are good 
for America or bad for America? A yes-or-no answer would be 
fine here.
    Ms. Omarova. Senator, that is a tricky question, because I 
do remember----
    Senator Hagerty. Are higher gas prices good for America or 
bad for America, Doctor?
    Ms. Omarova. It is probably bad for America. It is not my 
expertise. I am not sure exactly what you are asking.
    Senator Hagerty. Mr. Chairman, I would let the record 
reflect that this witness is having a hard time acknowledging 
that higher gas prices are bad for America.
    Last week, White House Press Secretary Jen Psaki stated 
that the Biden administration's view is that the rise in prices 
that we are seeing in gas over the long term make an even 
stronger case for doubling down on our investment and our focus 
on clean energy options. Do you agree with her statement? A yes 
or no would be fine.
    Ms. Omarova. Excuse me. What is the statement that you are 
asking?
    Senator Hagerty. Her statements is that higher gas prices, 
these rising gas prices, actually help justify the investments 
that the Biden administration wants to make in green energy. Do 
you agree with that?
    Ms. Omarova. Senator, I cannot say yes or no with respect 
to agreeing with the statement, the context of which I am not 
familiar with.
    Senator Hagerty. Well, let me say this, that many folks 
that are advocates, as you seem to be, of the green energy 
program that we are talking about, suggest that higher gas 
prices do support the cost justification for green investment.
    Now you have already said that, or at least have had some 
difficulty, but I think you think that higher gas prices are 
bad for America. If there is a belief that higher gas prices 
help justify, cost justify investment in the Green New Deal--my 
colleagues have brought up the fact that you have talked about 
wanting to bankrupt the oil and gas industry in order to help 
you achieve your green dreams, and higher gas prices help 
justify that pursuit.
    So I am trying to understand, Dr. Omarova, which would be 
the priority. Do you want lower gas prices, which would help 
prevent American's from going bankrupt, or do you want to use 
the authority of the OCC, of the Comptroller, to bankrupt oil 
and gas industries, as you have stated in the past?
    Ms. Omarova. Senator, I have never stated that the OCC 
should use the powers of the bank regulator to bankrupt oil and 
gas companies, so what----
    Senator Hagerty. I am going to come back your statement. 
You said that--I am going to come back to it in an exact quote. 
I think Senator Crapo read this earlier, that a lot of the 
smaller players in the coal, the oil, the gas industries are 
going to probably go bankrupt in short order, at least we want 
them to go bankrupt if we want to tackle climate change. This 
is very disturbing.
    I would say this. Americans are really hurting because of 
rising gas prices. Yet the Biden administration has taken step 
after step to destroy the oil and gas industry in America. They 
have destroyed our energy independence. They have killed 
pipeline projects. They are using regulatory authority to make 
it far more difficult to explore new oil and gas, and gas 
prices are going up dramatically as a result. And now we are 
talking about doubling down on this and putting someone into 
the position that can actually utilize the oversight of our 
financial system to cancel America's individual businesses.
    I want to come back to something that you said in the past. 
In a May interview, you were asked, ``How do you stop carbon 
financing? How do you make sure that existing financial systems 
and private asset managers do not continue to lend to carbon 
activities? How do you not have carbon financing leakages?'' 
That was the question that was put to you, Doctor.
    Did you answer, and I quote, ``I completely agree with you. 
The way we get basically rid of those carbon financiers is that 
we starve them of their sources of capital.'' Again, did you 
say that?
    Ms. Omarova. Senator, this was meant--when I said ``we,'' I 
meant ``we'' as private investors, as free actors in the free 
market economy. As an investor, I have a right to choose where 
I put my money, and that was the context in which I said those 
things.
    Senator Hagerty. That underscores your viewpoint, I 
believe. This happened just in May that you made that 
statement.
    Dr. Omarova, President Biden and the Democrats are talking 
about putting you in charge of an army of 2,400 bank examiners 
with a war chest of $1 billion. I want to ask you a simple yes-
or-no question again. Are you familiar with Operation 
Chokepoint?
    Ms. Omarova. Yes.
    Senator Hagerty. OK. I thought you would be. To explain it 
to everybody else, Doctor, Operation Chokepoint was a program 
in which Government officials intimidated banks to stop lending 
to lawful American businesses that Democrats did not like. It 
was called Operation Chokepoint because the Government abused 
its authority to try to choke off the financial oxygen from 
those targeted lawful businesses.
    I hope my Democratic colleagues fully understand why 
someone who cheers bankrupting law-abiding American businesses 
by starving them of capital, businesses that just happen to be 
out of political favor at the time, that is breathtakingly 
disturbing, especially given the position of responsibility 
that we are talking about Dr. Omarova potentially taking. 
Millions of American livelihoods depend on oil and gas jobs. 
Gas prices are soaring right now. It is not even winter and the 
Biden administration wants to cut American oil and gas. This is 
bad----
    Chairman Brown. The Senator's time is way over. If you care 
to answer quickly, you may.
    Ms. Omarova. Senator, I actually agree with you. Oil and 
gas industry is a very important part of the American economy. 
If confirmed as the Comptroller I have absolutely no intention 
of using the powers of that office to force banks to stop 
lending to oil and gas companies. I have never said that. The 
one, unfortunately, phrase, sentence, I tried to explain what I 
was trying to say there.
    But I completely agree with you, and I agree with your 
indignation.
    Senator Hagerty. Well, you----
    Chairman Brown. Senator Van Hollen is recognized, from 
Maryland, for 5 minutes.
    Senator Van Hollen. Thank you, Mr. Chairman. Look, we just 
had a previous Presidential administration that thought climate 
change was a hoax, despite what people can see with their eyes, 
and what the Biden administration is trying to do is promote 
more clean energy sources, things like wind, things like solar. 
And there are a lot of people who do not like that.
    Of course, this has very little to do with what the OCC's 
charge is, but I think it is important to recognize what this 
Administration is up to. President Biden was just over at the 
global conference. President Trump chose to pull us out of 
that. Those are choices Presidents make.
    But with respect to the OCC, and with some of the issues 
that have been raised regarding your background, there was a 
moment, as I was tuning in on TV, that I thought I was flashing 
back to the McCarthy hearings.
    Let me ask you this, Dr. Omarova, because apparently at 
least some individuals have forgotten that in totalitarian 
regimes, in communist regimes people have little freedom of 
choice in many cases. Is that not true?
    Ms. Omarova. That is absolutely true, Senator.
    Senator Van Hollen. All right. And in the case where you 
were actually able to make some choices under that regime, when 
you were pursuing, or after you had completed your 
undergraduate degree in philosophy, you were admitted to a 
Ph.D. program at Moscow State University, and there you were 
able to choose the topic to study. What topic did you choose?
    Ms. Omarova. I chose to study the modern theory of American 
democracy, because I was interested in learning how the 
American democracy, the best democracy in the world, works.
    Senator Van Hollen. And soon after that you also looked for 
opportunities to come to the United States on student 
exchanges. Is that not true?
    Ms. Omarova. I had been looking for that opportunity for 
quite a while by then, yes.
    Senator Van Hollen. And when you succeeded in doing that, 
when you arrived here, when you had interaction with the 
American financial system and capitalism, what was the 
experience? What was your response, given where you had come 
from?
    Ms. Omarova. I felt like I was able to breathe for the 
first time, like there was air in my lungs, and I will never 
forget that feeling. And that is what I value about this 
country. I value free markets. I value free enterprise. I 
understand very well the need to preserve the ability of 
private banking institutions and private businesses to allocate 
capital to the best uses.
    That is not at all what I am writing against. What I am 
writing against is the repetition of the 2008 crisis type 
things, when certain large institutions are able to privatize 
their gains by engaging in risky activities and then socialize 
the losses on the American taxpayer. That is what I am writing 
about. Thank you.
    Senator Van Hollen. Well, thank you. Look, clearly people 
can have differences of opinion on things that you have 
written, on policy issues. But the line of questioning I 
overheard earlier, again, suggesting that somehow you were a 
full and willing participant in the communist system in the 
Soviet Union, in my view took this hearing down a very 
different road.
    Let me ask you about something that you will be involved in 
as a member of the Financial Stability Oversight Council, and 
that is cybersecurity, because I think we see every day that 
cyberattacks pose threats, to our power grids and many other 
pieces of our important infrastructure, and that includes our 
financial system.
    What thoughts do you have as to the risks that currently 
being posed, and what additional actions that we need to take 
to protect that system from cyberattacks?
    Ms. Omarova. Thank you, Senator. You are asking a very, 
very important question. I believe that cybersecurity is 
probably the number one threat to the systemic stability of our 
financial markets, because cyberattacks are already causing 
tremendous economic losses, to banks and their customers, but 
more than that they pose a serious national security threat. 
One shudders to imagine what might happen if a particular 
attack takes out, let's say, the entire Federal Reserve system. 
That would be incredibly bad for everyone.
    I think that if I am confirmed as the next Comptroller I 
would start by, again, talking to the professionals at the OCC 
and at other financial regulators with respect to how we can 
combine our forces and work together better, or continue 
working together, and, you know, focus on the use of new 
technologies to protect our banks and their customers from 
cyberattacks, and also to think about how we can increase the 
level and the depths of expertise at financial regulators on 
technical issues specifically related to cyberattacks.
    I think that might be one of the specific issues on which 
the industry, the regulated industry, the banks, and the 
regulators and FinCEN, of course, and the Treasury folks can 
work together on figuring out practical tools of meeting that 
threat.
    Senator Van Hollen. Thank you.
    Chairman Brown. Thank you, Senator Van Hollen. Senator 
Lummis, from Wyoming, is recognized for 5 minutes.
    Senator Lummis. Thank you, Mr. Chairman, and I want to 
thank you, Dr. Omarova, for meeting with me in my office the 
other day. When we visited, I had never read anything you had 
written. I have since read some of the things you have written, 
and it seems to me there is a big disconnect between the person 
I met in my office and your writings. So some of the things I 
am concerned about now are how you view some of the things you 
have written and said in the last 3 years or so with what you 
will take with you into the OCC as a regulator. So I want to 
ask you some of those questions.
    Do you believe that Federal bank regulators, through the 
use of capital requirements, loan loss reserves, and 
supervisory standards, have the legal authority to starve an 
industry of their sources of capital?
    Ms. Omarova. Senator, I do not believe that is right. I do 
not believe that any Federal regulator should have, as its 
goal, to starve any specific company of capital. Those 
decisions should be left to private banks allocating credit.
    Senator Lummis. Will you pledge today not to repeat 
Operation Chokepoint and politicize the banking industry by 
targeting socially suboptimal companies?
    Ms. Omarova. Senator, if confirmed as the Comptroller of 
the Currency, I will make sure that that agency acts only 
within its legal mandate and performs its mission and does not 
step into the shoes of Congress and other policymakers who need 
to make those substantive decisions. That I completely can, you 
know, get on board with.
    Senator Lummis. I want to explore a little bit some of your 
discussions about stablecoins, CBDCs. I got the impression you 
believe only in fiat currency. Am I correct in that regard?
    Ms. Omarova. No, Senator. Well, let me explain that as an 
academic I am struggling with figuring out, you know, what the 
future holds with respect to digital currencies. We are very 
much in a state of flux now. Technologies are evolving very 
quickly.
    My concern, and I have expressed those concerns, is that 
despite all of the obvious benefits of private digital assets 
or digital currencies with respect to efficiencies, inclusion, 
and all those other benefits, we may end up in a situation 
where, for example, a large company, like a big tech company, 
might control all of the infrastructure through which the money 
that every American, every American family, every American 
business uses in their daily lives moves.
    Senator Lummis. And that bothers you?
    Ms. Omarova. That worries me.
    Senator Lummis. Why?
    Ms. Omarova. Because private companies, as you know, are 
pursuing private profits, and that is absolutely what they 
should be doing. And sometimes the pursuit of private profit 
may cut into our public interest in, for example, allowing 
everybody equal access, safe access to money----
    Senator Lummis. How do you think that you, as a regulator, 
can make the judgment calls that people do not have adequate 
access to capital when countries like El Salvador have 
recognized bitcoin as legal tender, specifically to grant 
people more access to capital?
    Ms. Omarova. Senator, I have not been to El Salvador, but 
my understanding is that before El Salvador recognized bitcoin 
as its official currency they were using U.S. dollar. And the 
U.S. dollar is, to me, the best money in the world.
    Senator Lummis. OK. So do you believe--I want to return to 
that question--do you believe that a Government-issued 
representation of currency, of value, is superior to private 
commerce?
    Ms. Omarova. I believe that we do have Government-issued 
money right now in this country, and it is working great. And I 
worry about allowing private innovation to undermine a lot of 
important public policies that we need to pursue in this 
country.
    Senator Lummis. OK. And what are those public policies?
    Ms. Omarova. Well, for example, national security. National 
security is a very important public policy, in my view.
    Senator Lummis. Do you think that bitcoin threatens 
national security?
    Ms. Omarova. I am not an expert on bitcoin but I would 
worry if all of our financial transactions were up to some 
blockchain system where, you know, various actors who might 
actually be located in other countries not particularly 
friendly to us controlled the functioning of that system. That 
would be my worry, yes.
    Senator Lummis. You did respond to the gentleman from Rhode 
Island about concerns about stablecoins, and that that could 
reduce the Federal Reserve's ability to execute monetary 
policy. Monetary policy is carried out in the capital markets, 
not by the Federal Reserve. Money creation takes place today in 
the form of commercial bank money from lending. So a stablecoin 
that is issued by a bank would also be a commercial bank money, 
backed 100 percent by reserves.
    So I am struggling with your view about digital assets. Mr. 
Chairman, thank you.
    Chairman Brown. Thank you, Senator Lummis. Senator Cortez 
Masto, from Nevada, is recognized for 5 minutes.
    Senator Cortez Masto. Mr. Chairman, thank you. Dr. Omarova, 
thank you for meeting with me, and congratulations on your 
nomination.
    Let me start here. In the previous Administration the 
Comptroller of the Currency stated that he saw banks as the 
agency's customers. In your extensive research and expertise, 
is it important that banking regulators see the protection of 
the markets and consumers as their main responsibility?
    Ms. Omarova. Yes, Senator. Thank you for this very 
important question. Absolutely. The OCC, just like any other 
banking regulator on the Federal level is a public agency and 
it has a public purpose that was established for it by 
Congress. The customers of the OCC are American families, 
American businesses, farms, you know, working people, 
everybody. Banks alone are not the customers of the OCC. It 
does not mean that the OCC should not be working with banks 
closely. If confirmed as the Comptroller, I fully intend to 
have an open-door policy, an open-mind policy, and I am willing 
to work with any bank of any size that is willing to channel 
credit into the real economy.
    Senator Cortez Masto. Thank you. And so let me touch on 
that, because across the Nation community banks are merging and 
closing branches in rural areas. In Nevada, as a result of the 
2008 financial crisis, a number of financial institutions 
closed, primarily those concentrated in our more rural 
communities.
    So what can the OCC do to support and strengthen community 
banks to help them meet their communities' banking and credit 
needs?
    Ms. Omarova. Yes. Thank you, Senator. Community banking is 
extremely important to the thriving of our American economy, 
and if confirmed as the Comptroller it will be one of my top 
priorities to make sure that community banks have all the 
supports from their regulator that they need in order to engage 
in innovative practices, carefully and responsibly, in order to 
perform their main lines of business, channeling credit into 
the communities.
    I would make sure that--at least I would do my best to make 
sure that they play on a level playing field, that they are 
protected from unfair competition from tech companies and other 
less-regulated entities, and that the regulatory burden on 
community banks is completely appropriate for the level of 
risks they pose, which is a lot lower than the risks posed by 
large, complex financial institutions.
    Senator Cortez Masto. Thank you. Now there is some 
consensus, for a change, to the Community Reinvestment Act to 
reflect the growth of online banking, a larger financial 
services ecosystem, and others. Have you given any thought to 
any changes to the CRA, and how do you think the OCC should 
work with the other regulators on any changes made to the CRA?
    Ms. Omarova. Thank you. I do believe that the CRA is an 
incredibly important tool in the toolkit of bank regulators to 
ensure that banks provide financial services, channel 
investments, and provide credit to low-income and moderate-
income communities and communities of color, rural communities, 
all those sorts of communities that are currently known as 
banking deserts. And I am very happy that the current Acting 
Comptroller has resumed OCC's effort to collaborate with other 
financial regulators on the comprehensive revamping of the CRA, 
to account for the new technologies and new abilities to serve 
this purpose.
    Senator Cortez Masto. Yes, and I too am appreciative of 
that collaboration now.
    Let me just jump to anti- money laundering. Terrorists and 
other malicious actors have gotten more sophisticated in their 
money laundering efforts. How would you work to enforce anti- 
money laundering and antiterrorism finance laws?
    Ms. Omarova. Yes. I am very much attuned to the importance 
of enforcing anti- money laundering and antiterrorist financing 
laws and regulations. It is extremely important.
    If confirmed as the Comptroller, one of the first actions I 
intend to take is to talk very seriously to the professional 
staff at the OCC and to see what they understand as the main 
practical issues and challenges on the ground that we need to 
address. My understanding is that we need to continue and 
strengthen the cooperation with FinCEN, with law enforcement 
agencies, with other financial regulators, to make sure that 
even with the advent of new technologies that may make some of 
those untoward activities easier to hide, we, as banking 
regulators, stand vigilant and are able to uphold the law.
    Senator Cortez Masto. Thank you. Thank you, Dr. Omarova.
    Chairman Brown. Thank you, Senator Cortez Masto. Senator 
Cramer, from North Dakota, is recognized for 5 minutes.
    Senator Cramer. Thank you, Mr. Chairman, and thank you, 
Professor, for being here.
    You have done a pretty good job of bifurcating previous 
opinions, papers, policy positions that you have bifurcated 
from this job, as though judgment does not matter, even if it 
is technically true. I mean, we did not ask you if you were a 
Vikings fan or a Colts fan or a Chicago Bears fan. These 
judgments, statements you have made, matter a lot, even if you 
do not have direct legal authority for a particular policy.
    But I want to pretend for a minute that you and I are in 
the faculty lounge, OK, and you are not applying for this 
really important job. Do you believe that starving the U.S. oil 
and gas industries of its capital, even though you have no 
intention of doing that as a Comptroller, do you believe that 
if it could lead to the bankruptcy of all the oil and gas 
companies in America that that would actually help climate 
change?
    Ms. Omarova. Well, Senator, first of all, let me tell you 
that I would love to engage you in a conversation in the 
faculty lounge, but in the faculty lounge people typically do 
not ask questions in the form, ``Do you believe?'' But I am 
very confident in telling you that I believe that oil and gas 
industry is an important part of the American economy. However, 
I also believe that there are important issues in the long 
term. As a human being, as a person, as a mother, I want my 
child to live in the world that does not suffer from hurricanes 
of unusual proportions, from fires that devastate farms. All of 
that stuff is happening. I am not an expert on climate change. 
What I do know is that the Comptroller of the Currency, of 
course, is not a climate----
    Senator Cramer. But--and I appreciate all of that. My 
question, though, is more about--and I will make the point--
America's role in this, and America's role in the solution 
versus what people like John Kerry and Gina McCarthy are 
advocating, which is really transferring their climate guilt to 
polluting countries--to polluting countries. Like somehow if we 
shut down the industry in the United States that, you know, 
Russian natural gas or Venezuelan oil or, you know, Saudi oil 
somehow does not have a negative impact on the climate, that we 
will all be better if we just starve capital in the United 
States.
    I would submit to you that building up the oil and gas 
industry in the United States of America would have a greater 
impact on reducing climate change than starving it.
    I want to get to another previous lecture, and I have to 
say it is really rich to be lectured by the Senator from 
Massachusetts about vicious personal attacks. She spends 5 
minutes, pretty much every hearing, doing exactly that, 
depending on who the witness is. But there has been a lot said 
about why it would be obvious that Wall Street banks do not 
support your nomination. Why do you suppose independent banks 
do not, because the Independent Community Banks of America, and 
several State independent banking groups, also strongly oppose 
your nomination. It is not all about Wall Street.
    So if you are such a pro-community banker, why do you think 
that they oppose you so strongly?
    Ms. Omarova. You know, Senator, I am with you on that. I 
wish the community bankers and their association, trade 
association, actually read more carefully what I have written, 
because what I have written, in fact, differs fundamentally 
from the descriptions of what I have written, that have been, 
you know, perpetrating in the media.
    I cannot speak to the reasons as to why a particular trade 
association supports or opposes a particular nomination. All I 
can say is that if I am the Comptroller, community banks will 
find no better or stronger ally than they would find in me.
    Senator Cramer. OK. I am going to try to drill down just a 
little more on this statement about socially suboptimal, and 
you have refused to answer what you believe is socially 
suboptimal industry might be. Do you think that a regulator 
ought to have the authority to determine what a socially 
suboptimal industry is, and then make determinations on whether 
they ought to be lent to by a community bank, a large bank, a 
Wall Street bank, or an independent investor?
    Ms. Omarova. Senator, I believe that regulators should 
never substitute their policy judgment for the judgment of 
Congress. When I said suboptimal policies I meant for Congress 
to make those policy decisions. What kind of activities we want 
to support, what kind of activities we do not want to support, 
it is ultimately up to Congress. It is not a regulator's job. I 
completely agree with you on this one.
    Senator Cramer. I actually happen to think that all the 
right incentives are already in place for risk assessment by 
the banks themselves. But anyway, with that, thank you, Mr. 
Chairman. Thank you for the----
    Chairman Brown. Thank you, Senator Cramer. Senator Daines, 
from Montana, is recognized for 5 minutes.
    Senator Daines. Mr. Chairman, thank you. I do want to join 
my colleagues in expressing extreme concern with the nomination 
of Professor Omarova to head the Office of Comptroller of the 
Currency. The professor's extreme views on energy, her desire 
to nationalize retail banking, to place Government officials on 
private company boards, have the Government set price controls 
on food, gas, and other everyday goods, and her hostility 
toward innovation in the digital currency space are just a few 
of the reasons that Montanans and Americans should be very 
concerned about this radical nomination.
    What is said in the past, what is said in academic 
writings, what we say publicly matters, and you cannot run 
away--a nominee cannot run away from what they said in the 
past, whether it is an academic setting or not. Each one of us 
here has run for public office. What we have said in the past, 
what we have written in the past matters, and that is what we 
use as a basis to determine if someone is qualified or not to 
serve in these very important capacities.
    In a March of 2021 seminar, just 8 months ago, Professor 
Omarova stated, with regard to oil, gas, and coal companies 
that, quote, ``We want them to go bankrupt if we want to tackle 
climate change,'' end quote. That is very clear.
    In May of this year, Professor Omarova went further and 
called for debanking these industries, stating that, quote, 
``The way we basically get rid of these carbon financers is we 
starve them of their source of capital,'' end quote.
    These are chilling statements and beliefs, and I believe 
they are disqualifying for someone seeking to hold such a 
powerful office. The fact that President Biden would even make 
such a nomination further solidifies how radically liberal and 
out of touch the mainstream views of the White House are.
    Professor Omarova, in a 2017 paper entitled ``Bank 
Governance and Systemic Stability: The `Golden Share' 
Approach'', you advocated for a fundamental, structural 
reconfiguration of bank governance by giving the Federal 
Government a seat on the board of each systemically important 
banking organization. You specifically proposed that 
Government, and I quote you, ``take partial ownership stakes in 
firms in order to exercise voice in the deliberations that 
ultimately issue in firm's decisions,'' end quote.
    You also proposed giving the Federal Government power to 
manage financial institutions directly if certain conditions 
are met by, and I quote, ``grant direct but conditional 
management rights to a designated Government representative on 
the board of each affected institution.''
    Professor, I lived in China for 6 years, working for 
Procter & Gamble. I have seen the effects of when big 
Government, when communist Governments take over the private 
sector. Placing Government officials on boards of banks, to 
propose that is chilling.
    Do you still believe that the Government should have seats 
on the boards of private companies?
    Ms. Omarova. Senator, thank you for bringing up this 
particular paper and allowing me to clarify that comment. So 
the idea of a ``golden share'' did not come from China or from 
the Soviet Union. In fact, to me it came from reading about 
Margaret Thatcher's Government, their decision to introduce the 
``golden share'' mechanism with respect to the newly 
privatized, in the 1980s, strategically important companies. 
This is where I drew my inspiration for the idea, just kind of 
to push the envelope a little bit of thinking about if we can 
introduce a very contingent and very limited ability for the 
public voice in the governance of systemically important 
financial institutions, only under situations when the 
financial stability, systemic stability, and national security 
are threatened. That is all I----
    Senator Daines. So I just want to be clear. OK. But you do 
still--and you put conditions to it, but you still believe that 
the Government should, in some situations, have seats on the 
boards of corporations.
    Ms. Omarova. Yeah, I am with Margaret Thatcher on this one.
    Senator Daines. I cannot speak for Margaret Thatcher here 
this morning, but I have got to believe that if Margaret 
Thatcher had a vote on your nomination she would be opposed to 
it.
    Returning to your comments earlier this year saying you 
want oil and gas companies to go bankrupt, in that statement 
you specifically said you hoped that small--small--oil, gas, 
and coal companies go bankrupt. Your exact words were, quote, 
``A lot of the smaller players in the industry are going to 
probably go bankrupt in short order. At least we want them to 
go bankrupt if we want to tackle climate change.''
    Professor, do you believe that is the role of the Federal 
Government to specifically target small, family owned 
businesses in an attempt to bankrupt them, destroying their 
livelihoods and the communities that they support?
    Ms. Omarova. Senator, once again, like I said before, what 
I was actually saying in that comment was the opposite, that we 
need to find new ways of helping small energy companies get 
over--get through the hard times so that their workers do not 
lose their jobs. That hurts local economies. I completely 
agree.
    Senator Daines. Wait a minute. You said at least want them 
to go bankrupt if we want to tackle climate change.
    Ms. Omarova. So that one sentence I already I am sorry that 
I misspoke. It was not a well-phrased sentence. But the 
meaning, and I insist on it, was----
    Senator Daines. I think the meaning is pretty clear.
    Thank you, Chairman. Let me close, if I might, the dominant 
theme of your career has been promoting very radical, socialist 
ideas. The position you have been nominated for would put you 
in a position to implement some of these ideas. The thought of 
that is chilling, and this Committee, in my opinion, should 
unanimously reject your nomination.
    Chairman Brown. Thank you, Senator Daines. There is time 
for a second round for the Ranking Member and for me. Then 
there are, of course, QFRs available to everyone.
    Senator Toomey. Mr. Chairman, I really want to strongly 
object to this. Everybody on our side, virtually everybody, has 
other questions that have not been covered, and there is a 
second round that they would like to have. We communicated this 
very clearly some time ago. We would be perfectly happy for you 
to designate anyone you choose. I would volunteer, but it 
certainly does not have to be me. Anyone you choose could 
simply recognize people in whatever order. I really think it is 
completely premature to try to shut down this hearing at this 
point.
    Chairman Brown. Senator Toomey, I am certainly not shutting 
it down. We announced earlier that the hearing would end at 12. 
We started the hearing a half an hour earlier. This is, I 
think, the biggest turnout on your side any time since I have 
chaired, and I know there is interest. But that is the purpose 
that QFRs always follow, so the decision of the Chair stands.
    Senator Toomey. If QFRs were adequate, Mr. Chairman, we 
would not have hearings. There is a reason that we have 
hearings. It is so that we can have a thorough discussion. This 
is one of the most powerful financial regulators in the world 
that we are talking about, and members have a lot of 
substantive questions. They should have a right to ask those 
questions.
    Chairman Brown. And they have, two-and-a-half hours of 
questions. So that is the decision I am making. I will begin my 
questions and then turn to Senator Toomey.
    There are those, mainly Senators, Professor Omarova, who 
like to tout this institution as the world's greatest debating 
society, but when debate turns to complex, nuanced issues, the 
substance and the context are often lost. So let's break it 
down one more time. Professor, is your concern about the end of 
banking primarily driven by rapid technological change that 
threatens local community banks? Is that your concern?
    Ms. Omarova. Yes, it is.
    Chairman Brown. You believe that rapid technological change 
already threatens local community banks. Is that correct?
    Ms. Omarova. Absolutely, yes.
    Chairman Brown. So your papers are part of the debate 
trying to imagine--to imagine--how we ensure the ongoing 
viability of local community banks. Is that correct?
    Ms. Omarova. That is absolutely correct.
    Chairman Brown. So you are sounding an alarm, if I am 
reading this right. You are sounding an alarm about the future 
of community banks, absolutely not calling for their end. 
Correct?
    Ms. Omarova. That is absolutely correct.
    Chairman Brown. So to be clear, you support--and then thank 
you for that.
    Let me turn to 2155, which has been mischaracterized by a 
number of people. You support tailored regulation for community 
banks who do not engage in the risky activities of the largest 
Wall Street banks. Correct?
    Ms. Omarova. I absolutely do.
    Chairman Brown. And you supported provisions of 2155, as I 
did--I was opposed to the bill but supported a number of 
provisions to tailor regulations for relationship banks. 
Correct?
    Ms. Omarova. Yes. I strongly supported those provisions.
    Chairman Brown. And many of my colleagues supported 2155 
because regulators testified that it would reduce burden for 
small banks. Is it correct that your concern was that 
regulators would use 2155, that law, would use 2155 authorities 
to lower capital and regulatory requirements for large, 
complex, foreign banking operations and organizations?
    Ms. Omarova. That was exactly my sole concern with that 
bill, and just that.
    Chairman Brown. Thank you. And last set of questions. We 
hear our friends talking about the term ``socially suboptimal'' 
a lot today, a term I am not sure I really was very familiar 
with before. Does this not simply refer to a basic free market 
economic principle that some activities have undesirable social 
outcomes or externalities?
    Ms. Omarova. Yes, it does.
    Chairman Brown. I am on the Ag Committee. I have worked in 
a bipartisan way to improve farm conservation programs. Would 
farming practices that incentivize erosion and animal waste 
runoff be socially suboptimal?
    Ms. Omarova. I think they would be. I am not an expert in 
agriculture.
    Chairman Brown. I think you are right.
    Congress, whether in the form of the farm bill or 
elsewhere, addresses socially suboptimal practices all the 
time. Correct?
    Ms. Omarova. That is absolutely correct.
    Chairman Brown. And that is--if you would, expand on this a 
bit. That is what you are referring to, that Congress can and 
does regulate behavior it believes as socially suboptimal, 
whether that is farm conservation, food free of sawdust, and 
medicines that include ingredients actually on that label. That 
is what you are referring to that Congress can and does 
regulate, behavior it believes are socially suboptimal.
    Ms. Omarova. That is exactly what I believe in and that is 
exactly what I was referring to. It is up to Congress to define 
those.
    Chairman Brown. And that is what you were writing about.
    Ms. Omarova. That is what I am writing about, yes.
    Chairman Brown. OK. Thank you. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. Let's go back for 
a second to the thesis issue, which some have suggested somehow 
should be irrelevant. The reason I think it is relevant is 
Professor Omarova chose to advertise her thesis on her resume, 
right up through 2017, and that is why I asked for it.
    But Professor Omarova, you did not reply to my request but 
you give interviews in the media citing the reasons why it 
should not be relevant, the reasons why it did not matter, you 
did not believe it then, or you do not believe it now, or both. 
But is it not true that you waited until this past Friday to 
inform my staff that you actually do not have a copy of it?
    Ms. Omarova. Senator, I did not----
    Senator Toomey. Kind of true/false. Is it true that you 
informed my staff on Friday that you do not have a copy of it?
    Ms. Omarova. I did inform them, yes.
    Senator Toomey. Yeah. It just seems odd that we would have 
to wait 6 weeks to discover that, oh, you do not have it after 
all, and it seems odd that you would make all these arguments 
for why it should not need to be turned over if that is all a 
moot point.
    Let me go to this issue of allocation of capital, because I 
am pretty sure I heard you say that you support the private 
allocation of capital. That is what you are saying here before 
us this morning. But you have cast enormous doubts in so much 
of what you have said and written. It is very clear you are 
deeply skeptical about private allocation of capital, and you 
think the Government would do a better job. It is your quotes.
    You did a podcast recently, I think it was, and it is 
called the ``Banking and Finance Law and Political Economy 
Project'', and it was in June of this year you said, and I 
quote, ``We need to correct the misallocation of money and 
credit in the U.S. economy, and we need to correct it on a 
systemic level,'' end quote.
    Another quote. You said, ``We need to make sure banks 
channel money and financial resources precisely where, as the 
Nation, as a community really need it to go,'' end quote.
    Another quote. You say, ``Why don't we revive a greater 
public role in the capital markets and financial markets to a 
role not just of rulemaker, cop, janitor, but a role of actual 
market participants.'' These are all your words.
    In that same interview you said, and I quote, ``We need to 
think about how to change the mindset about how we think about 
the role of Federal Government, vis-a-vis private business. It 
is a team sport, and in a team sport we all win or we all lose 
under the same circumstances. And you know, every team requires 
a captain, and so the Federal Government should step into that 
role and should become the captain in terms of allocation of 
resources. And I think that what the Government needs to do is 
it needs to step into the private market operations, right, in 
order to align the incentives of individual corporations with 
the interest of the public,'' end quote.
    That is a lengthy quote, and I did it to provide the 
context, the repeated context in which you are deeply critical 
of the idea of a free enterprise system privately allocating 
capital, and you express a preference for the Government 
allocation of capital. And what worries us is this is not like 
an idle suggestion that was thrown off the cuff. You have 
developed a whole framework for how to implement this. This NIA 
that you conceive of is really meant to be like a Government-
owned private equity venture to allocate capital in ways that 
you prefer.
    And I have to underscore, the powers that you would have, 
including discretionary powers, are enormous. And when you 
combine this deep skepticism about private allocation, advocacy 
of Government intervention, advocacy for greater Government 
involvement, and let's get away from the regulators just being 
referees on the field and have them be more--now remember, you 
advocated that the Federal Reserve set prices across our 
economy by openly buying and selling commodities to manipulate 
the price to where the Fed wants it to be.
    And as the head of the OCC, you said you would only do what 
is within its legal mandate. The problem is its legal mandate 
is very broad, and there is a lot that is discretionary. You 
would get to decide who gets to open a bank and who does not. 
You would get to decide what kind of loans can be made, and 
which ones cannot. You could forbid a bank from a merger. You 
could forbid a bank from opening new branches. You could create 
or destroy a whole category of bank charters. You could decide 
which kinds of loans receive favorable regulatory treatment 
through the CRA eligibility. And every bank would know that 
their fate is, to a very large degree, in your hands, and they 
would know what your views are, about the banking industry, 
about the private allocation of capital.
    This is what is so chilling. I think this answers the 
question of why so many, including community banks, are very, 
very concerned about where you would take the Office of the 
Comptroller of the Currency.
    Chairman Brown. Thank you, Senator Toomey.
    Prior to this hearing we had witnessed, in my memory, the 
worst character assassination aimed at a nominee, since I have 
been here. For a while in this hearing I was encouraged my 
colleagues tried sticking to policy, although misstating 
Professor Omarova's positions, taking many of her works out of 
context. Senator Scott, to his credit, came here and stated 
that no Republican Member had attacked Dr. Omarova for coming 
from the former Soviet Union. Minutes later, Senator Kennedy 
repeated the same vile, disgusting attacks we have heard all 
along, the same attacks I mentioned in my opening. Attacking a 
nominee's positions is one thing. Calling a nominee 
``comrade,'' as if we do not know what that means, is something 
else. It is beneath the dignity of this institution.
    I came here hoping that we could focus on what matters, on 
fair questions about writings and records and statements and 
plans for this job. We have heard from Professor Omarova, in 
her own words, how she will be a fair Comptroller, a reasonable 
Comptroller, a Comptroller that will make sure everyone plays 
on a level playing field. We welcome that. She will work to 
ensure community banks can provide credit and provide financial 
investments to communities throughout the country she loves. 
That is what type of Comptroller she will be.
    Thank you for appearing today. Productive discussion. For 
Senators who wish to submit questions, and I know there will be 
many, those questions are due at the close of business on 
Monday, the 22nd of November. To Ms. Omarova, we would like to 
have your responses by Tuesday, November 30th, at the latest.
    With that, the----
    Senator Toomey. Mr. Chairman. You said we would have a 
round of questions. You and I both did. And you just made a 
closing statement. I look forward to a brief closing statement. 
Thank you.
    Look, the conclusion, it is very, very clear. Over a long 
period of time, consistently, repeatedly, in multiple media, 
Professor Omarova has promoted radical--``radical'' is her 
description--nationalizing the banking system, imposing 
Government price controls, espousing the idea that money is a 
public, not a private good, curtaining economic innovation, 
dramatically limiting economic freedom and choice, having the 
Government seize seats on corporate boards. The list goes on 
and on. These are ideas consistent with a socialist view of a 
command-and-control economy. That is what this is. That is the 
definition.
    In addition, she has promoted antidemocratic ideas such as 
this National Investment Authority, which is meant, explicitly 
meant, to be outside of the realm of Congress, and empower that 
to allocate resources. The idea that we would put a person with 
these views as the chief regulator of America's national banks, 
with the enormous powers that I just delineated, this is what 
is deeply disturbing and chilling and why I recommend to my 
colleagues that we not support, not confirm this nominee.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Toomey. The Committee is 
adjourned.
    [Whereupon, at 12:05 p.m., the hearing was adjourned.]
    [Prepared statements, biographical sketches of nominees, 
responses to written questions, and additional material 
supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    The Committee meets today to consider the nomination of Saule 
Omarova to be the Comptroller of the Currency. Congratulations to 
Professor Omarova for being nominated to this important role. Welcome 
to the Committee.
    And welcome to your friends and family watching from home.
    I applaud the Biden administration for this historic nomination. 
Professor Omarova will be the first woman, first person of color, and 
first immigrant to serve as the Comptroller of the Currency.
    Ms. Omarova is one of the most qualified nominees ever for this 
job.
    She is widely regarded as a leading expert on banking law and 
policy. She holds a doctorate from the University of Wisconsin at 
Madison and a law degree from Northwestern University. She has taught 
at the University of North Carolina at Chapel Hill and at Cornell 
University.
    She has served as a senior advisor in the United States Treasury 
under a Republican administration. She has worked at one of New York's 
most prestigious banking law firms.
    She is an accomplished researcher and writer and has published 
dozens of works on topics critical to our understanding of the 
financial system. More than 70 financial regulatory experts from across 
the political spectrum, including bankers, have endorsed her 
nomination.
    Professor Omarova has testified in Congress many times, before many 
different committees, and found common ground with Senators on both 
sides of the aisle. I would urge my colleagues to review her discussion 
with Senator McCain for the Permanent Subcommittee on Investigations 
when she testified on physical commodities trading and manipulation. Or 
watch her conversation with my friend Mike Crapo on data privacy here 
in the Banking and Housing Committee.
    These are the serious policy conversations of a thoughtful, 
balanced professional.
    Some Republican Senators have decided that this job shouldn't go to 
the most qualified candidate.
    Despite her unquestioned expertise and her bipartisan record, they 
have worked with their powerful friends in this town to degrade this 
confirmation process.
    Just a week after news of her nomination became public, the Wall 
Street Journal ran an op-ed--or perhaps more accurately, a hit job--on 
Professor Omarova.
    They highlighted that she went to Moscow State University and 
received a scholarship named after Vladimir Lenin--neglecting to 
mention that pretty much everything in the 60s, 70s, and 80s in the 
Soviet Union was named after Lenin.
    Besides, there were no Friedman or Reagan scholarships available.
    They made outlandish, unfounded claims based on where she grew up. 
They say she believes the Soviet economic system was superior to ours. 
And they accused her of wanting to establish communist rule over 
banking here in the United States.
    The Wall Street Journal neglected to mention that she renounced her 
communist citizenship and became an American. They also neglected to 
mention that she started her family here. They neglected to mention the 
deep ties she has to the American universities where she studied and 
worked. They neglected to mention her patriotic service to her chosen 
country at the United States Department of the Treasury under George W. 
Bush.
    Escaping communism, moving to America for a better life, embracing 
American values or hard work and public service--what could be more 
American than that?
    Only a few days after the op-ed was published, the Ranking Member 
piled on. He requested that Professor Omarova supply the committee with 
a paper she had to write as an undergraduate.
    To be clear: this Committee never requires anyone to submit 
unpublished undergraduate work as part of the nominations process. I 
don't remember any nominee who has faced a similar request, nor do I 
think that what college kids are writing is generally a good guide for 
their policy views three decades later.
    So staff on the Committee can breathe easy--if you aspire to a 
presidential nomination, you won't need to turn in your sophomore book 
reports on the ``The Scarlet Letter''.
    Not only did the Ranking Member request the paper, he put out a 
press release to tell the world that he was requesting this paper. He 
went out of his way to mention the same Lenin Scholarship that the Wall 
Street Journal did. He liberally sprinkled the words ``Marx,'' 
``Lenin,'' ``Moscow,'' and ``Russian'' throughout--a total of 12 
times.a full dozen instances of guilt by association.
    And then he sent another press release.
    Since then, he and other Republican Senators have taken to the 
Senate Floor to repeat these vile attacks that suggest this nominee 
doesn't share our American values.
    They have a formula--start with a passing and inaccurate reference 
to her academic work. Distort the substance beyond recognition. Mix in 
words like ``Marx,'' and ``Lenin,'' and ``communism.'' End with 
insinuations about Professor Omarova's loyalties to her chosen country.
    That's how Republicans turn a qualified woman into a Marxist 
boogeyman.
    We know that some people in Washington have been calling their 
political opponents socialists and communists for years.
    I'll let Professor Omarova tell her own story but I'd venture to 
guess that those words ring a little differently to those who've 
experienced communist oppression first hand.
    We know that a shadowy political group founded by former Trump 
staff has been fomenting these personal attacks and pushing radical 
right-wing news sites to spread that misinformation. These inflammatory 
insinuations continue to stoke the unhinged rhetoric that has poisoned 
our politics.
    Now we know what happens when Trumpism meets McCarthyism.
    It's a cruelty no person should experience.
    Professor Omarova and her family suffered generations of oppression 
under a brutal communist dictatorship. She worked hard, went to the 
best American schools she could, became an American citizen, started a 
family, and spent her career fighting to give more Americans the 
opportunities she was denied behind the Iron Curtain.
    That hard work got her where she is today. Just think about that--a 
Khazaki kid growing up in Soviet central Asia--30 years later, she's 
sitting before the Senate as the President's nominee for Comptroller of 
the Currency. Imagine that.
    She embodies everything we ought to celebrate--the fighting spirit 
that makes this Nation great. The tenacity to strive for a better life. 
And the openness and opportunity of America that attracts the best 
minds--from all over the world, from all backgrounds.
    From growing up in the Soviet Union, to escaping to build a new 
life here, to enduring this last month of personal attacks with 
dignity, Professor Omarova has demonstrated the strength and 
independence that she'll need to be a fair, impartial, and tough 
Comptroller.
    She has both the private industry and the public policy experience 
to prevent a repeat of the financial crisis. A crisis that cost 
millions of Americans their homes and jobs and that shuttered hundreds 
of community banks.
    The Leadership Conference on Human and Civil Rights, the Center for 
Responsible Lending, National Urban League, Unidos U.S., National Fair 
Housing Alliance, and National Community Reinvestment Coalition--all of 
these organizations have written a letter demanding a stop to the 
despicable attacks on Professor Omarova.
    I've worked with all of you on the committee. I'd hope you all have 
a sense of decency.
    I expect my colleagues to treat Professor Omarova with the dignity 
and respect she deserves. And I ask you to listen--really listen--to 
her words as she shares her story, shares her views about how she will 
do this job, and shares with us how she wants to serve her fellow 
Americans.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Thank you, Mr. Chairman.
    I've read a variety of Prof. Omarova's writings and watched videos 
of her speaking. I have no doubt that she's an intelligent, 
knowledgeable, and experienced law professor.
    My concern with Prof. Omarova is her long history of promoting 
ideas that she herself describes as ``radical.'' I agree that they are 
radical. But I'd also describe them as socialist. In fact, I've never 
seen a more radical nominee to be a Federal regulator.
    Let's talk about some of Prof. Omarova's radical ideas. For 
starters, she wants to ``effectively `end banking' as we know it.'' 
What does that mean? Well, she's told us.
    In ``The People's Ledger'', a paper she published just last month, 
she outlined her plan for nationalizing retail banking. Under her plan, 
``central bank accounts fully replace--rather than uneasily coexist 
with--private bank deposits.''
    In other words, you couldn't have an account with your local 
community bank. Your money would be held by the Government at the 
Federal Reserve.
    Countless Americans were outraged over recent Democrat plans for 
the IRS to get their personal bank account information. Imagine their 
reaction to having the Government actually take over their bank 
accounts.
    Prof. Omarova also has a proposal to control the money supply 
through these individual FedAccounts, including when necessary 
``implementing a contractionary monetary policy by debiting'' those 
accounts. For those of us who are not accountants, debiting means 
subtracting.
    This, she allows, could be ``perceived as the Government `taking 
away' people's money.'' I think I know why--because it is the 
Government taking away people's money.
    Prof. Omarova's plan would devastate all banks, but especially 
community ones that rely on deposit-taking for lending money to local 
businesses and residents. What would happen to these banks under Prof. 
Omarova's plan to outlaw their business model?
    According to ``The People's Ledger'', Prof. Omarova might allow 
these community banks to continue to exist but only as ``franchisees'' 
for the Government, if they qualify for a license to ``operate physical 
branches and ATMs on the Fed's behalf.'' I see.
    Except that Prof. Omarova would deny these banks their source of 
funding deposits. And without a source of funding, banks can't lend to 
a woman opening a new restaurant in town, a tool and die shop looking 
to expand, or newlyweds buying their first home, or anything else.
    Given that she wants community banks to become vassals of the 
Government, it's no wonder the Independent Community Bankers of America 
and banking associations from 41 States so far oppose her nomination.
    As Ricky Leal, Senior Vice President at First Community Bank in 
Texas stated: ``The entire theory in banking, especially local 
community banking, is based on gathering up deposits from the local 
community and loaning back out into the local community so that those 
dollars are cycled through and stay local. . . . You'd lose all that. A 
world without the local deposit, it would change banking as we know 
it.'' But, of course, that's the idea.
    Prof. Omarova says in ``The People's Ledger'' that one reason she 
wants the Fed to become everyone's bank is to ``maximize its capacity 
to channel credit to productive uses in the Nation's economy.'' It's 
troubling to ponder how she--or anyone in the Government--would define 
productive uses in our economy.
    How about loans to oil, gas, and coal companies--would Prof. 
Omarova consider them productive? Well, we actually know the answer.
    Earlier this year, at a Social Wealth Seminar she said publicly of 
these energy businesses: ``We want them to go bankrupt if we want to 
tackle climate change.''
    She also said at an Investment and Decarbonization seminar this 
year: ``the way we basically get rid of those carbon financers is we 
starve them of their source of capital.''
    And she's created an entire blueprint for how the Government could 
do this and she has advocated her plan in testimony to Congress.
    The last thing we need now--with some Americans paying $5 a gallon 
for gas and home heating costs soaring due to the Biden 
administration's disastrous energy policies--is a banking regulator who 
wants to push perfectly legal, and economically necessary, companies 
that employ millions of Americans into bankruptcy.
    Prof. Omarova's radical ideas don't stop there. She has a plan for 
the Government, through the Fed, to replace the free market in setting 
what she calls ``systemically important prices'' for things like food, 
wages, and energy. And since the Administration's done a great job on 
inflation, I'm sure Americans can't wait until the Fed starts directly 
controlling prices for eggs, milk, and rent, too.
    This isn't the only time Prof. Omarova has expressed support for 
Government controls on wages. As she tweeted in 2019: ``Say what you 
will about old U.S.S.R., there was no gender pay gap there. Market 
doesn't always `know best'.''
    I suspect Prof. Omarova may claim that as Comptroller she wouldn't 
have the power to act on all of her radical views. But the truth is the 
Comptroller is a powerful regulator.
    It wields enormous powers through bank chartering, regulation, 
enforcement, and, especially through its opaque supervision process. 
The Comptroller is also a member of the FDIC Board and the Financial 
Stability Oversight Council, America's financial super-regulator.
    Prof. Omarova may also claim her writings are just thought 
experiments. But for the last decade, she's been a consistent, forceful 
advocate for these radical ideas in her writings, public statements, 
and in testimony before Congress.
    Taken in their totality, her ideas amount to a socialist manifesto 
for American financial services: nationalizing the banking system, 
putting in price controls, and creating a command-and-control economy 
where the Government allocates resources instead of free men and women 
making their own decisions about the goods and services they want to 
buy and sell in an open market.
    These are exactly the kind of socialist ideas that have failed 
everywhere in the world they've been tried. In my view, Prof. Omarova's 
policy views are too radical, and preserving the prosperity that our 
free market economy makes possible is too important, to make her our 
Nation's top banking regulator.
                                 ______
                                 
                 PREPARED STATEMENT OF SAULE T. OMAROVA
                   To Be Comptroller of the Currency
                           November 18, 2021
    Chairman Brown, Ranking Member Toomey, Members of the Committee, it 
is a great honor to appear before you today. Allow me to begin by 
thanking President Biden for the confidence and trust he placed in me 
by nominating me to be the Comptroller of the Currency. I am deeply 
honored for another opportunity to serve my country as I did under 
President George W. Bush. I would also like to thank my husband, my son 
and my mother, and all of my many friends for their love and support 
throughout the years. I appreciate the time many of the Committee 
Members have taken to meet with me personally. And for those of you who 
have not met me yet, I am happy to have a chance to share with you who 
I am and what I believe in. I grew up in an all-women household, under 
a totalitarian regime presiding over a failing economy. My mother, a 
doctor at a local hospital, worked long hours, just to make ends meet. 
I was raised by my grandmother, a soft-spoken woman who was orphaned 
and barely escaped death when, in the 1920s, Stalin sent her entire 
family to Siberia. The crime for which my grandmother's family was 
killed was that they were educated Kazakhs who did not join the Party. 
That is why, to me, pursuing education and academic excellence was an 
act of defying political oppression and injustice. I studied hard, got 
into the best university I could, and was ultimately able to fulfill my 
dream of coming to America--the land of opportunity and freedom.
    I came to the United States in 1991, with one suitcase and a fifty-
dollar bill in my pocket. I fell in love with this country and its 
people from day one. That was the beginning of my personal version of 
the American Dream. I earned a doctorate from the University of 
Wisconsin and a law degree from Northwestern University. I practiced 
banking law at one of the top law firms in New York City, and served in 
the U.S. Treasury under the George W. Bush administration. These 
experiences taught me invaluable lessons about how financial 
``sausage'' is made and how that can lead to devastating financial 
crises. That is why my academic work has been focused on safeguarding 
the stability and resilience of our financial system. In the 2008 
crisis, I saw what happens when powerful market players generate 
excessive risk and leverage outside of regulators' view--and leave the 
American taxpayer to foot the bill when the speculative boom turns 
bust. We cannot afford a repetition of this destructive scenario, 
especially now, in the aftermath of the global pandemic. If I am 
confirmed to lead the Office of the Comptroller of the Currency, my top 
priority will be to guarantee a fair and competitive market where small 
and mid-size banks that invest in their neighbors' homes and small 
businesses can thrive, and where every community--regardless of wealth, 
geography, or history--has access to safe and affordable financial 
services. A critical part of that task is preserving and fostering the 
relationship banking that drives economic growth and creates local jobs 
and prosperity. I am thinking here of my own community bank in Ithaca, 
New York--Tompkins Trust--where they know every one of their customers 
and care about our community's needs. That is what I see as the true 
heart of American banking.
    Today, the community banks that perform the crucial function of 
extending credit to local small businesses and hardworking families are 
disappearing, leaving many urban and rural communities without 
meaningful access to financial services. Community banks are also 
forced to compete with Big Tech companies, like Facebook, that do not 
play by the same rules. These issues are deeply personal to me. Having 
grown up in an oppressive State-run system, with no free enterprise and 
no economic opportunity for people like me, I have a unique 
appreciation for our dynamic and diverse markets. It is what made my 
life and success possible, and for that I am forever grateful. Every 
American family should have the same opportunities that my family has 
had.
    If confirmed by the Senate, I will work to ensure that our 
financial system gives every family the tools they need to build their 
own American Dream.
    I will pursue this goal alongside the committed career 
professionals at the OCC. I will serve the American public with the 
utmost dedication and integrity, and I will do everything in my power 
to protect and strengthen the safe and stable banking system that makes 
America work.
    Thank you, and I look forward to your questions.
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
        RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
                     FROM SAULE T. OMAROVA

Q.1. Where have you excelled in past and current positions in 
attracting, hiring, and promoting people of color? Where might 
there be room for improvement?

A.1. As a woman of color, I have a deep understanding and 
appreciation of the need to increase diversity in the 
workplace. As a law professor, I have always endeavored to 
mentor young lawyers and students of color. The lack of 
meaningful diversity is a persistent problem in the financial 
services sector and at Federal regulatory agencies. If 
confirmed as the Comptroller of the Currency, I would make 
increasing diversity, both at the OCC and in the banking 
industry, an important practical priority. I would work closely 
with the Office of Minority and Women Inclusion (OMWI) to 
identify and implement concrete measures for improving the 
OCC's own recruitment and retention practices. In addition, I 
would engage with the OCC staff on finding new ways to 
encourage and facilitate greater diversity within the banking 
industry.

Q.2. What specific measures will you use to evaluate the 
success of the Office of the Comptroller of the Currency (OCC) 
in understanding and addressing the needs of Black, Indigenous, 
and people of color (BIPOC)? And, will you work with senior 
officials to keep Congress apprised, as appropriate, on the 
progress being made on these measures?

A.2. Understanding and addressing the financial needs of Black, 
Indigenous, and people of color (BIPOC) would be one of my top 
priorities, if I were confirmed as the Comptroller of the 
Currency. In order to evaluate the agency's success in meeting 
the needs of these communities, I would use metrics from the 
OCC, other Federal banking agencies, as well as industry and 
consumer groups to determine what needs are being met. I would 
especially want to engage directly with the BIPOC communities, 
to get a fuller picture of how they view the OCC's performance 
with respect to meeting their needs. I would work with these 
groups to determine ways to improve the OCC's efforts to 
provide safe and affordable banking services to BIPOC 
communities.
    If confirmed, I would work closely with senior officials to 
keep Congress apprised, as appropriate, on the progress being 
made on these measures.

Q.3. What is your plan for creating an inclusive working 
environment for employees within your office?

A.3. I believe that creating healthy, inclusive working 
environment for employees should be an important organizational 
priority for the head of any Federal agency. If confirmed as 
the Comptroller of the Currency, I would keep an open mind and 
maintain an open-door policy, so that OCC employees can freely 
raise important issues and concerns related to the agency's 
work and organizational climate. I would also regularly 
communicate and meet with the different departments and 
employee groups, in order to get continuous direct feedback on, 
and potentially complaints about, the direction in which the 
agency is moving and the way it is managed.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TOOMEY
                     FROM SAULE T. OMAROVA

Q.1. In a 2016 essay, you set out a list of regulatory 
strategies, the most troubling of which explicitly endorsed the 
Federal Government setting prices in the economy.
    You wrote that the Fed ``perhaps in conjunction with other, 
functional regulators'' would ``buy and sell in markets . . . 
with a view to keeping particular [systemically important 
prices and indexes] within particular bands thought necessary 
for the purposes of maintaining systemic stability.''
    In other words, instead of allowing the market to set 
prices according to supply and demand, the Fed would decide the 
prices of goods and other services then act accordingly to keep 
those prices fixed within a certain range.
    You continued by identifying ``various candidates for 
[systemically important prices] here,'' including, ``widely 
used fuels, foodstuffs, and some other raw materials'' and 
``wage or salary indices.''
    The Fed was established to control one thing, the value of 
the U.S. dollar. Your idea would put the Government, acting 
through the Fed, in direct control of deciding how much 
individuals should pay for specific goods and services 
throughout a huge part of the economy.
    Do you stand by your proposal to have the Government set 
and maintain certain prices?

A.1. This question does not accurately represent my views 
expressed in the essay entitled ``Systemically Significant 
Prices'', 2 J. Fin. Reg. 1 (2016), https://papers.ssrn.com/
sol3/papers.cfm?abstract-id=2580078.
    The essay was written in response to the scandalous 
revelation of manipulation of the London Interbank Offered Rate 
(LIBOR) by several major banks. For decades, LIBOR was used as 
the core benchmark for pricing trillions of dollars in bonds 
and derivatives instruments in global markets. The power to 
determine this interest rate effectively enabled a small group 
of traders to manipulate a huge slice of the global financial 
market. The LIBOR scandal significantly undermined public trust 
in the financial sector, which was already low in the aftermath 
of the financial crisis of 2008.
    In this essay, we proposed a general conceptual framework 
for understanding the critical role of benchmark prices like 
LIBOR--which the essay defines as ``systemically significant 
prices'' (SSPs)--in maintaining the integrity and efficiency of 
private financial markets.
    The essay provided a taxonomy of different types of SSPs, 
including the Federal Funds Rate managed by the Federal Reserve 
in pursuit of its monetary policy, the S&P500 index used as 
benchmark in equity markets, as well as certain commodity and 
housing prices used to gauge the State of the U.S. economy. The 
essay explained how self-regulatory organizations, central 
banks, antitrust authorities, and other agencies have 
traditionally managed some well-known SSPs--and how many other 
SSPs escaped regulatory attention and remained susceptible to 
manipulation and unsustainable boom-bust cycles.
    On the basis of this analysis, the essay outlined a wide 
range of legal and regulatory strategies that policymakers 
could use in order to prevent dangerous manipulation or 
speculative abuses of SSPs by private market participants. The 
essay did not take a definitive stance on any particular 
option. It did not advance any specific proposals for any 
specific regulator. And it certainly did not advocate any form 
of direct price-setting by the Government.
    If confirmed as the Comptroller of the Currency, I will 
focus solely on matters within the OCC's jurisdiction. My 
academic writings on matters outside of the OCC's jurisdiction 
will not influence my actions as a regulator.

Q.2. Your attitude on transparency and accountability is highly 
important in considering your nomination to be the lead Federal 
regulator of national banks. You have proposed in writings, 
speeches, and Congressional testimony to create a National 
Investment Authority (NIA) as a new Federal agency to direct 
``a massive infrastructure-led rebuilding and greening of the 
U.S. economy'' which you stated would ``fulfill its explicitly 
public--hence, explicitly political--mission through credit 
allocation and asset management . . . ''
    Citing an explicit desire to ``sidestep debilitating 
political battles over the Federal budget''--also known as 
policymaking by democratic representatives--you proposed the 
agency channel both public and private capital to further 
policies set by an unaccountable, unelected board.
    The board would serve 10-12 year terms, and could not be 
removed by the president except ``for cause.'' The NIA also 
would be exempt from the appropriations process, hence making 
it virtually unaccountable to Congress.
    Finally, the NIA would be partly overseen by an advisory 
board made up of ``academic experts and public interest 
advocates,'' a feature that you argued would be a ``democratic 
accountability'' measure.
    Do you stand by this proposal?

A.2. This question does not accurately represent my academic 
proposal to establish a National Investment Authority (NIA), a 
Federal entity tasked with coordinating and financing the 
nationwide reconstruction of America's crumbling public 
infrastructure.
    The NIA proposal has deep--and deeply patriotic--American 
roots. It is not about ``nationalizing'' infrastructure but 
about making the United States stronger and better equipped to 
maintain its dominant position in the global economic and 
political order.
    The NIA is explicitly modeled after the Reconstruction 
Finance Corporation (RFC), a Federal entity established in 1932 
under President Hoover. During the Great Depression, the RFC 
became the country's biggest and most effective source of 
credit and capital that helped to save millions of American 
businesses and communities. Organized as a Federal Government 
corporation, the RFC systematically supplied massive amounts of 
credit and equity capital to banks, big and small businesses, 
and public agencies at a time when private credit was scarce. 
During World War II, the RFC operated multiple subsidiary 
corporations that produced strategic materials and military 
goods essential for the war effort. In more than 20 years of 
its existence, the RFC demonstrated the tremendous practical 
benefits of targeted Government participation in specific 
strategically important segments of the market.
    The NIA proposal seeks to recover this historically 
successful tradition of promoting America's economic growth 
through public-private cooperation and partnership. The NIA's 
goal would be to supplement and amplify--rather than replace--
both the existing fiscal policy channels and private investment 
in our country's infrastructure. As I explained in my writings, 
both of these presently existing mechanisms have significant 
limitations, so that many transformative public infrastructure 
projects simply do not get funded on the necessary scale. The 
NIA would fill that gap, much like the RFC did in the 1930s and 
1940s.
    Today, nearly every developed economy in the world--
including Germany, France, Ireland, Italy, Singapore, China, 
Russia, and many others--has some version of public finance 
institution of this type. By continuing to ignore its own 
historical success with public-private investment, the United 
States risks falling behind in its effort to meet the 
challenges of the 21st century.
    Of course, given my personal experience, I am acutely aware 
of the dangers associated with any unaccountable power. I take 
democratic accountability and transparency extremely seriously. 
In fact, the NIA proposal explicitly lays out multiple 
mechanisms for ensuring public accountability and transparency 
of the NIA's operations. These include regular reporting to and 
oversight by Congress, regular audits, and many other well-
established tools of holding Federal entities accountable to 
the American public. To call the NIA ``virtually unaccountable 
to Congress'' is to ignore all of these core features of the 
actual proposal.
    For these reasons, I stand by the NIA proposal as it is 
laid out in my writings. If confirmed as the Comptroller of the 
Currency, however, I will not be in a position to implement or 
work on this proposal, which requires an Act of Congress. My 
academic writings on matters outside of the OCC's jurisdiction 
will not influence my actions as a regulator.

Q.3. Additionally, you have proposed creating an unaccountable 
``Public Interest Council''--an independent Government agency 
designed to pressure American citizens, companies, and 
regulators. Its ``core mission would be to put the financial 
services industry and the regulators overseeing it under a 
constant and intense public scrutiny.''
    The agency would lack meaningful accountability to 
democratically elected representatives in any branch of 
Government. Members of the Council, made up of ``highly paid 
full-time'' academic experts and ``representatives of consumer 
protection groups, public interest organizations, public 
pension funds, [and] possibly major labor unions,'' could only 
be removed by Congress ``for good cause.'' It would be 
``located outside of the legislative and Executive branches'' 
and ``would not be subject to the constraints and requirements 
of the administrative process . . . .''
    The agency would have the power to issue subpoenas and hold 
hearings on any topic, and to influence agency rulemaking. 
``[I]t is critical to ensure that the Council has statutory 
powers enabling it to influence the regulatory process so it 
does not serve as a merely consultative body . . . .''
    Your proposal would create perhaps the only American 
Government institution specifically designed to generate 
political power outside of the electoral process and use media 
and messaging as a ``weapon'' against its own citizens, 
companies, and regulators: `` . . . the key weapon in the 
Council's political arsenal would be its power to mobilize 
public opinion around pertinent issues in financial services 
regulation . . . . In today's world of social media and other 
innovative forms of mass communication, the Council can . . . 
generate mass political support for the actions it considers 
necessary. Skilled use of the media would allow the Council to 
build its independent power base . . . .''
    According to your paper, mainstream, moderate members who 
believe in a more limited role for Government would undermine 
the council: ``experts, selected to serve on the Council, may 
genuinely oppose the concept of more proactive regulation of 
financial markets on theoretical grounds. All of these factors 
may significantly limit the Council's effectiveness.''
    Do you stand by this proposal?

A.3. This question does not accurately represent the academic 
proposal to create a Public Interest Council (the Council), 
described in my article ``Bankers, Bureaucrats, and Guardians: 
Toward Tripartism in Financial Services Regulation'', 37 J. 
Corp. L. 621 (2012), https://papers.ssrn.com/sol3/
papers.cfm?abstract-id=1924546.
    This article explores how we can adapt our existing 
mechanisms of public oversight to better protect the American 
public against systemic financial crises like the crisis of 
2008. The American system of Government has many well-
established checks-and-balances that aim to prevent abuse of 
power and overreach by Federal agencies and officials. For 
example, we have multiple offices of Inspector-General (IG), 
agency ombudsmen, the Government Accountability Office (GAO), 
and various Congressional oversight commissions. These 
institutions are meant to introduce an independent set of eyes 
into the regulatory process. Unfortunately, the 2008 crisis 
revealed the lack of a sufficiently independent perspective in 
financial regulation.
    This article, written shortly after the crisis, proposes 
the creation of a new Public Interest Council that would 
function as a hybrid between a typical Inspector General and a 
Congressional oversight commission. The new Council's sole 
function would be to keep a watchful eye on financial 
regulators, so they don't grow too complacent or fall under 
undue influence of the financial industry interest groups.
    Of course, designing strong accountability mechanisms is 
critically important for any such institution to work. The 
Council's status would be similar to that of the GAO or a 
Congressional commission that exists on a permanent basis. As 
proposed in the article, the Council would be directly and 
fully democratically accountable to Congress. The proposal does 
not envision granting this new Council any powers that exceed 
the powers of current IGs or Congressional commissions. It is 
not meant to be a super-regulator, but merely an independent 
watchman on behalf of the American public.
    For these reasons, I stand by my proposal as it is laid out 
in my writings. If confirmed as the Comptroller of the 
Currency, I will not be in a position to implement or work on 
this proposal, which requires an Act of Congress. My academic 
writings on matters outside of the OCC's jurisdiction will not 
influence my actions as a regulator.

Q.4. In your paper proposing the ``Public Interest Council'' 
you also suggested that the Financial Stability Oversight 
Council (FSOC), which is America's financial super-regulator, 
could sidestep Congress and create a more limited version of 
this proposed body through administrative fiat. You wrote:
    ``For instance, the newly created FSOC may establish, by 
regulatory action, an independent council of experts to advise 
the FSOC on issues of systemic risk regulation. This 
arrangement would remove some of the thorniest legal and 
practical issues the Public Interest Council proposal raises. 
Importantly, Congress would not need to get involved.''
    The Comptroller of the Currency has a statutory seat on the 
FSOC.
    If confirmed, would you commit to not propose or support 
creation by the FSOC of any new advisory councils?

A.4. If confirmed as Comptroller of the Currency, I will focus 
on fulfilling the OCC's core mission: to strengthen and 
preserve the safety and soundness of the national banking 
system and to ensure fair access to credit for all American 
families, businesses, and communities.

Q.5. On May 20, 2021, you participated in a discussion about 
your NIA proposal at a Jain Family Institute roundtable titled 
``Investment and Decarbonization.'' In your opening remarks, 
you described how the NIA would serve in part as a Government-
run asset manager and private equity fund offering a guaranteed 
rate of return backstopped by the Government (i.e., taxpayers). 
As you said at that May 20, 2021, roundtable:
    ``The idea originally came when I and Bob Hockett my 
colleague here . . . worked on a series of articles about how 
to reinvigorate the public presence and public control over the 
financial system and the flow of capital, not into speculative 
investments like it does now, but into the productive 
enterprise, into the building of infrastructure. . . . The way 
I see the NIA proposal and trying to work on it now, is sort of 
to make the NIA the dedicated institutional platform at the 
Federal level for really being the kind of fighting muscle of 
the Green New Deal, and fighting muscle of, you know, all of 
these other movements pursuing environmental justice, 
socioeconomic justice, equality, and so on and so forth, in a 
very practical sense. And the key to me is that this be a 
separate, standalone institution that cannot be in my view 
situated inside the Treasury or inside the Fed. It has to be a 
standalone institution because its job has to be to get inside 
the financial markets and effectively out compete the Wall 
Street banks and asset managers that come to play an incredibly 
important role in managing and controlling the flow of 
capital.'' (emphasis added)
    You also said at that roundtable:
    ``One last thing that makes it so important to have the 
NIA-type entity, is that the NIA at least in the proposal that 
is currently, kind of, in the works, that I am trying really 
hard to draft the legislative bill in a way that keeps that 
idea, the NIA has to have the flexibility of tools that it can 
employ. In other words, I don't believe only in loans and 
grants as the right tools to incentivize the right investment, 
private and public, in the right way. We need to have control. 
Control over how that money is deployed and managed on a day-
to-day basis. Much in the same way as private equity funds and 
venture capital funds control how their money is used, right. 
And that way, they also control the returns. And this is where 
we need that new function that we currently don't have in the 
Federal system, that asset management function, not just a 
lender function but the type of a BlackRock institution, only a 
publicly owned BlackRock.'' (emphasis added)
    Do you stand by your proposal to have the Government create 
its own investment fund, offering a return guaranteed by the 
Government, i.e., the taxpayer, to compete with BlackRock and 
other investment funds?

A.5. I explained the core rationale and essence of my NIA 
proposal in the answer to an earlier question. The full details 
of the NIA proposal are laid out in my many writings on the 
subject, and I would encourage everybody to read them in order 
to understand what the proposal does--and does not--entail. A 
few sentences taken out of context cannot fairly describe the 
idea.
    The NIA is not meant to replace direct fiscal spending on 
public infrastructure; nor is it intended to compete in private 
markets for investment opportunities that already attract 
sufficient private funding. The proposed NIA would target 
investments only in those infrastructure projects that do not 
typically get funded at the necessary scale, either in private 
markets or through the existing fiscal channels. While there is 
plenty of private capital eager to invest in ``hard'' assets 
like toll roads in heavily trafficked areas, private investors 
are rationally averse to funding inherently risky 
transformative projects that take a long time to become 
profitable in any commercial sense. Public investment, in turn, 
is often constrained as a result of political and budgetary 
limitations, jurisdictional conflicts, and lack of internal 
coordination.
    The NIA would step into this persistent funding gap. As 
described in my writings, it would use existing market 
mechanisms to help private capital find more and better 
opportunities for productive deployment. The NIA is envisioned 
as a mutually beneficial public-private partnership that aligns 
private investors' interests with the long-term interests of 
the American public. The NIA would work with the market, follow 
the logic of the market, and enhance market efficiency.
    For these reasons, I stand by the NIA proposal as it is 
laid out in my writings. If confirmed as the Comptroller of the 
Currency, however, I will not be in a position to implement or 
work on this proposal, which requires an Act of Congress. My 
academic writings on matters outside of the OCC's jurisdiction 
will not influence my actions as a regulator.

Q.6. Later during the same May 20, 2021, roundtable, you said:
    ``When we say direct public investment, you better mean 
actual State-owned enterprise. Because if you don't mean just 
that, then what you mean is public money given to private 
actors, and that's not what we need to do. And then on EIB 
[European Investment Bank], Danielle I'm completely with you. 
The way we, this is, the NIA is actually meant to be a 
different model than EIB right. So the way we basically we get 
rid of these carbon financers is we starve them of their 
sources of capital. And it's not about some kind of dedicated 
affinity or special affinity with Green New Deal it's about 
that. Give them a safe asset that pays more than US Treasury 
bond, and take them away from the current carbon financers.'' 
(emphasis added)
    It is clear that you are referencing your proposal that a 
new National Investment Authority--a Federal agency and arm of 
the Government--channel the capital of investors to whatever 
projects the Government prefers over ``carbon financers,'' and 
which the Government can control through its management of the 
equity.
    At your nomination hearing, immediately after it was noted 
that you would be in a position to utilize oversight of the 
American financial system to affect energy investment, you were 
asked about your statement at this Jain Family Institute 
seminar that ``the way that basically we get rid of these 
carbon financers is we starve them of their sources of 
capital.''
    You responded: ``Senator this was meant, when I said `we' I 
meant we as private investors, as free actors in the free 
market economy. As an investor I have a right to choose where I 
put my money, and that was the context in which I said those 
things.''
    But given the context of your remarks noted above--that the 
NIA is a Government entity controlling capital flows--would you 
like to change or modify your response?

A.6. As I explained in my answers to earlier questions, the NIA 
proposal is laid out in detail in my prior writings. My 
response during the questioning at the nomination hearing, 
quoted above, is consistent with those writings.
    Under my proposal, the NIA would simply offer private 
investors (like pension funds and ``green'' funds, for example) 
a new set of opportunities for investing their capital in 
transformative public infrastructure projects America so 
desperately needs. Nobody will be forced to invest in the NIA 
funds. Adding NIA instruments to the existing menu of 
financial-market choices would only broaden private investors' 
ability to express their longterm preferences. Some private 
investors may decide to invest in the NIA funds supporting new 
clean energy production, while other private investors may 
choose to invest in traditional energy companies--just as they 
do today. That's investor choice in a free capitalist market, 
the importance of which I emphasized during the questioning at 
my nomination hearing.

Q.7. At your nomination hearing, Senator Tester asked about 
your remarks at a February 9, 2021, ``social wealth seminar'' 
hosted by the Jain Family Institute that you ``want [coal, oil, 
and gas companies] to go bankrupt if we want to tackle climate 
change. ``You responded to him that: And I actually misspoke. 
That was not well framed. My intention was actually saying, was 
exactly the opposite, that we need to help those companies to 
get restructured.''
    The opposite would be not having the Government design 
policies to force energy companies into bankruptcy. However, it 
appears that you do want these firms to be forced into 
bankruptcy because you went onto describe what would happen 
next after they are forced into bankruptcy: the Government 
would ``become a kind of equity investor at that point, taking 
over management of those companies and basically leading them 
through restructuring to a new technological basis and to a new 
technological business model.''
    Do you no longer support forcing coal, oil, and gas 
companies into bankruptcy in order for the Government to take 
them over and ``lead them through restructuring''?

A.7. This question misrepresents my views and my statements.
    I have never supported the Government forcing any 
individual companies into bankruptcy. My point was that the 
Government should help those energy companies that cannot 
sustain profitable operations in the existing market 
conditions, in order to prevent massive loss of American jobs 
these companies' bankruptcies would cause.
    A free capitalist market decides which companies survive 
and which technologies command the future, but we need to help 
millions of hardworking Americans in the energy sector 
transition safely into that future and not be left behind. That 
is what I support.

Q.8. During your nomination hearing, you said ``digital 
currencies . . . offer a lot of potential benefits from the 
perspective of efficiency, of payments, for example, efficiency 
of transactions in financial system, potentially increasing the 
level of financial inclusion because it's so easy and much 
cheaper now to transact in--in digital assets and digital 
currencies.'' However, you have previously said that digital 
currencies benefit ``mainly the dysfunctional financial system 
we already have.''
    Do you still believe digital currencies mainly benefit the 
existing financial system?

A.8. Digital currencies are increasingly incorporated into our 
existing financial system, which suggests a mutually beneficial 
relationship.

Q.9. What specific elements of this system do you view as 
``dysfunctional'' and deriving benefit from digital currencies?

A.9. The tendency to encourage excessive financial speculation 
that diverts capital away from the real economy is one well-
known dysfunction of our current financial system. This starves 
American businesses and households of vital resources, 
undermines our country's global competitiveness and national 
security, and leads to devastating financial crises that 
disproportionately hurt the most vulnerable Americans. We have 
seen these dynamics unfold in the 2008 crisis. If digital 
currencies can amplify or create new speculative booms, that 
should be a serious reason for concern for responsible 
policymakers.

Q.10. What specific examples of digital currencies do you 
believe increase efficiency of payments and transactions?

A.10. By reducing transactional frictions, digital currencies 
are presumed to increase market efficiency.

Q.11. What examples can you offer of digital currencies that 
could increase financial inclusion?

A.11. By making transactions more accessible on mobile devices 
and potentially cheaper, digital currencies create an opening 
for greater financial inclusion. Whether or not that promise 
becomes reality, however, is an empirical question.

Q.12. In your work advocating for all retail deposits to be 
held at the Federal Reserve, you stated that administering a 
central bank digital currency (CBDC) through existing 
institutions like banks would ``significantly complicate the 
task of designing CBDC and slow down the process of its 
implementation.'' However, at the hearing you said ``My worry 
is that if we take this step without fully understanding the 
implications of it, we may hurt community banks and mid-sized 
banks.'' Do you believe community and mid-sized banks should be 
involved in the creation of a CBDC even if it slows down 
implementation of a CBDC?

A.12. I believe that, whatever choice U.S. Congress makes with 
respect to issuing CBDC, it is essential to preserve and 
strengthen community and mid-size banks that engage in 
traditional relationship banking and lending.

Q.13. You have previously advocated for the Government to have 
``the ability not only to monitor cryptotrades from the 
outside, in the way traditional regulators do, but also to 
operate directly inside the relevant markets.''
    By ``operate,'' are you suggesting a role for Government 
actors on market platforms that goes beyond surveillance? 
Please answer yes or no.

A.13. The academic article from which this phrase is taken--
``Technology v. Technocracy: Fintech as a Regulatory 
Challenge'', 6 J. Fin. Reg. 75 (2020), https://papers.ssrn.com/
sol3/papers.cfm?abstract-id=3545468--provides full explanation 
of its meaning.

Q.14. If so, under what circumstances should the Government 
engage in the sale and purchase of crypto assets?

A.14. I believe Congress should decide whether, and under what 
circumstances, the Government should engage in the sale and 
purchase of crypto assets.

Q.15. Should the Government have access to every transaction 
that occurs on cryptomarkets? Please answer yes or no.

A.15. I have never argued that the Government should have 
access to every transaction in cryptomarkets. I believe it is 
up to Congress to make this type of decision.

Q.16. Should the Government have more access to private 
transactions in crypto than they do in transactions involving 
the dollar? Please answer yes or no.

A.16. I believe Congress should decide the extent of the 
Government access to financial market transactions.

Q.17. Should Federal agencies have the same level of oversight 
for cryptotrades made between private individuals not involving 
an intermediary versus a transaction made on an exchange? 
Please answer yes or no.

A.17. I believe Congress should establish the appropriate level 
of Federal oversight for different types of financial trades.

Q.18. You have stated that ``Democratizing finance . . . is an 
inherently political exercise,'' and we can only achieve that 
goal ``through a coherent and comprehensive program of 
[Government] reforms.''
    What previous Government actions have facilitated the 
development of digital currencies or other financial 
technologies?

A.18. It is my understanding that the U.S. Department of 
Defense has funded and facilitated a lot of fundamental 
scientific research that led to the creation of technologies 
without which not only digital currencies but the Internet 
itself either would not have existed or would have developed 
much more slowly.
    More generally, decades of Federal grants to U.S. 
universities and researchers enabled and supported fundamental 
research in physics, mathematics, and computer science. Today's 
financial technologies are commercial applications built on the 
foundation of this publicly funded research.

Q.19. What steps would you take at the OCC to democratize 
finance?

A.19. If confirmed as Comptroller of the Currency, I will use 
existing legal tools at the OCC's disposal to fulfill its core 
mission of strengthening and preserving the safety and 
soundness of the national banking system and ensuring fair 
access to credit for all American families, businesses, and 
communities.

Q.20. You have previously stated, ``chartering banks is a 
fundamentally political act.'' Is providing for custody of 
cryptocurrency, using cryptocurrencies to executive bank-
permissible functions like payment activities, or issuing a 
stablecoin appropriate actions of a national bank? Why or why 
not?

A.20. This is a complex and technical question that requires an 
in-depth discussion and legal analysis of the specific facts 
and circumstances in front of the OCC. If I were confirmed as 
Comptroller of the Currency, I would work with the agency's 
career staff to carefully evaluate the evolving landscape of 
bank interactions with digital assets and cryptocurrencies.

Q.21. You were an undergraduate student at Moscow State 
University from 1984 to 1989. According to your resume on the 
Cornell Law School website, you majored in philosophy at Moscow 
State University and received your diploma from that university 
in June 1989.
    Based on interviews with several former students at Moscow 
State University who knew you in college, the Daily Mail 
reported that you studied ``scientific communism'' and wrote 
your thesis on this topic at Moscow State University. For 
example, the Daily Mail reported that: ``A friend in her dorm 
block was Olga Lakhina, 54, a Moscow-based art exhibitions 
curator, who confirmed Omarova studied scientific communism--
described as the science regarding the working-class struggle 
and the socialist revolution.''
    Your undergraduate thesis, which you listed on your resume 
as recently as April 2017, was entitled ``Karl Marx's Economic 
Analysis and the Theory of Revolution in The Capital''. After 
you received your undergraduate degree from Moscow State 
University, you continued to attend Moscow State University 
until 1991.
    Your current resume on the Cornell Law School website 
states that from September 1990 to May 1991 you were a teaching 
assistant for the Department of Philosophy at Moscow State 
University. As you know, teaching assistants at American 
universities typically help professors teach courses and grade 
student work. However, you did not list this position on your 
nominee questionnaire to the Banking Committee.
    Why did you omit this position from your Banking Committee 
questionnaire?

A.21. Soviet universities operated very differently from 
American universities. As I recall, this was not a paid or 
formal position (like it would be at a typical American 
university) but a mandatory assignment I was given as a 
graduate student.

Q.22. What were your responsibilities as a teaching assistant 
at Moscow State University?

A.22. To the best of my recollection, it involved general 
assistance to a full-time professor who taught the course and 
graded oral exams.

Q.23. What were the topics of the courses you served as a 
teaching assistant for (e.g., scientific communism)?

A.23. I do not recall the topic of that course.

Q.24. What were the topics of the courses that you taught as a 
teaching assistant (e.g., scientific communism)?

A.24. See answers to a, b, and c above.

Q.25. The nominee questionnaire that you submitted to the 
Senate Banking Committee states that you worked as a part-time 
adjunct lecturer at the Moscow Energy Institute from September 
1990 to May 1991. As recently as July 2014, you listed both 
your teaching assistant position at Moscow State University and 
your lecturer position at the Moscow Energy Institute as 
separate positions on your resume.
    What were your responsibilities as a lecturer at the Moscow 
Energy Institute?

A.25. To the best of my recollection, I was a part-time 
temporary lecturer in a course taught to undergraduate students 
at that college.

Q.26. What were the topics of the courses you lectured on at 
the Moscow Energy Institute?

A.26. To the best of my recollection, it was an introductory 
overview of political science or philosophy.

Q.27. Please describe with specificity what the Moscow Energy 
Institute was and did at the time that you worked there.

A.27. Moscow Energy Institute was an undergraduate college for 
petroleum engineers and related technical specialties.

Q.28. At your nomination hearing, Senator Chris Van Hollen 
asked you about your Ph.D. studies at Moscow State University. 
He stated: ``And in the case where you were actually able to 
make some choices under that regime, when you were pursuing or 
after you had completed your undergraduate degree in 
philosophy, you were admitted to a Ph.D. program at Moscow 
State University, and there you were able to choose the topic 
to study.'' Senator Van Hollen then asked you: ``What topic did 
you choose?''
    You answered: ``I chose to study the modern theory of 
American democracy, because I was interested in learning how 
the American democracy--the best democracy in the world--
works.''
    Your statement that American democracy was the topic of 
your Ph.D. studies at Moscow State University appears to be 
inconsistent with how a close friend of yours described your 
academic studies at Moscow State University and your academic 
career plans before the fall of the Soviet Union in December 
1991.
    In the acknowledgment section of you University of 
Wisconsin Ph.D. dissertation, you thanked Charles D. Ellis, a 
well-known investment consultant, for his ``kindness and 
generosity'' and described him as a ``very special friend.'' 
You also received the Charles D. Ellis Moscow State University 
Scholarship from 1992 to 1994 at the University of Wisconsin.
    In 1998, Mr. Ellis wrote a chapter in a book titled 
``Investment Management''. In a footnote to this chapter, Mr. 
Ellis wrote the following about you: ``Saule Omarova, a student 
from Kazakhstan, `invested' several years studying scientific 
Communism at the University of Moscow, only to witness in her 
senior year the elimination--along with the Soviet Union and 
the Communist Party's power in the early 1990s--of all hope for 
the entire career for which she had prepared so 
conscientiously. The academic discipline she had mastered and 
the field in which she planned to teach were obliterated.'' You 
completed your undergraduate studies in 1989, when the Soviet 
Union was still intact. In the early 1990s, you were a graduate 
student at Moscow State University, including a teaching 
assistant in that university's Department of Philosophy.
    Please explain the apparent contradiction between Mr. 
Ellis' remarks that you were studying scientific communism with 
the response you gave to Senator Van Hollen.

A.28. There is no contradiction. In the Soviet Union, 
``scientific communism'' was the official term for ``political 
science.'' To the best of my recollection, that academic 
specialty was officially rebranded as ``political science'' in 
1990, when I was a Ph.D. student at Moscow State University.

Q.29. What was the topic of your Ph.D. studies at Moscow State 
University?

A.29. Modern American theory of democracy.

Q.30. Before the fall of the Soviet Union, did you plan to 
teach scientific communism after you earned your Ph.D. at 
Moscow State University?

A.30. As a Ph.D. student in Moscow, I was planning and hoping 
to leave the Soviet Union and to continue my education in the 
West.

Q.31. Your undergraduate thesis, is titled ``Karl Marx's 
Economic Analysis and the Theory of Revolution in The 
Capital'', You listed this thesis on your publicly available 
resume on the Cornell Law School website as recently as April 
2017. By doing so, you publicized to the world, including the 
U.S. Senate, that your thesis is an important part of your 
academic achievements and record. In addition, the Banking 
Committee requires nominees to provide it with the ``books, 
articles, reports, and other published materials'' that they 
have written.
    On September 29, 2021, my Banking Committee staff emailed 
you requesting a copy of your thesis. You never responded to 
this request. Two days later, my staff shared this request with 
the legislative affairs staff at the Office of the Comptroller 
of the Currency (OCC). OCC staff responded that they would 
``circle back'' after you were officially nominated and your 
paperwork was submitted to the Banking Committee.
    Since I was concerned about the time it might take to 
translate your thesis from its original Russian into English, I 
sent you a letter on October 5, 2021, requesting that you 
provide your thesis to the Banking Committee no later than 
October 13, 2021. You never responded to my letter, but you did 
find time to speak with the Financial Times about your thesis.
    On October 14, 2021, the Financial Times published an 
article about its interview with you that stated: ``Omarova 
would not disclose whether she intended to submit the essay, 
though she had not done it by the Wednesday deadline set by 
Toomey.'' The Financial Times article also included your 
rationale for why you did not need to provide your thesis to 
the Banking Committee. You stated: ``I was in the Soviet Union, 
where there was no academic freedom, and this was a mandatory 
assigned topic. What I wrote in that paper has nothing to do 
with what I believed in then or in what I believe in now.'' You 
never claimed in this article that you no longer have a copy of 
your thesis.
    On November 3, 2021, you submitted your nominee 
questionnaire to the Banking Committee without a copy of your 
thesis. At that time, OCC staff told my Banking Committee staff 
that you did not need to provide your thesis to the Banking 
Committee because it is not a published writing. OCC staff 
never told my staff that you no longer have a copy of your 
thesis.
    On November 12, 2021, during a phone call with my Banking 
Committee staff, you told them for the very first time that you 
no longer have a copy of your thesis and that you left your 
only copy in the Soviet Union when you came to the United 
States in 1991.
    If you have not had a copy of your thesis since 1991, why 
did it take you over 6 weeks from when my staff initially 
requested a copy of your thesis to tell my staff that?

A.31. The questionnaire I submitted to the Senate Banking 
Committee included over 75 scholarly articles, edited volume 
contributions, white papers, issue briefs, reports, blogposts, 
short essays, newspaper articles and op-ed pieces, all of which 
were published. This particular paper was written while I was 
an undergraduate in the Soviet Union; it was not published and 
not intended for publication. Accordingly, it was not within 
the scope of the information requested in the Committee 
questionnaire.

Q.32. Why did you think it was appropriate to ignore the letter 
I sent you on October 5, 2021?

A.32. My nomination was formally submitted on November 3, 2021. 
As requested, I included all of my published work in my 
responses to the Senate Banking Committee questionnaire. I had 
the opportunity to respond to direct questions from the 
majority and minority Senate Banking Committee staff on the 
date we arranged that was convenient for all parties to review 
my questionnaire responses on November 12, 2021.

Q.33. Leaders of Federal Government agencies, such as the 
Comptroller of the Currency, are expected to be responsive to 
requests for information from Congress. Given that you ignored 
my letter requesting information while your nomination was 
pending before the Senate, why should Senators believe that you 
will be responsive to congressional information requests if you 
are confirmed to lead the OCC?

A.33. If confirmed, I pledge to work through the accommodations 
process to comply with Congressional requests for information 
consistent with the constitutional and statutory obligations of 
the Executive branch.

Q.34. Normally, if a person lists a paper that she has written 
on her resume it indicates that she is prepared to provide a 
copy of that paper to a prospective employer upon request. Why 
did you list your thesis on your resume as recently as 2017 
when you have not had a copy of it since 1991?

A.34. As an academic, I regularly add to my Curriculum Vitae 
(CV) references to new published articles, speeches, testimony, 
and various other professional activities. My CV is long and 
continues to grow longer every year. While I am not in the 
habit of removing references to old work, I must have gotten 
around to updating my CV in 2017.

Q.35. While you ignored this reasonable congressional request 
for information, you found time to speak multiple times with 
the press about your thesis. For example, on November 17, 2021, 
New York Magazine reported: ``Omarova doesn't have the paper. 
`It was a written exam type of thing,' [Omarova] said. `We were 
assigned mandatory topics, and I got assigned something about 
Karl Marx, economic theory, I don't even remember. Nobody took 
it seriously; it was not meant to be an actual academic 
exercise. All you had to do was basically copy from whatever 
the textbook said, and that was that. So I wrote that paper, 
got my degree. Literally the next day, I forgot about it, just 
like every other graduate in my class forgot about their 
papers.' ''
    Given that your thesis ``has nothing to do with what [you] 
believed in then or in what [you] believe in now'' and was 
essentially plagiarized since you wrote it by ``basically 
copy[ing] from whatever the textbook said,'' why did you 
publicize it on your publicly available resume on the Cornell 
Law School website as recently as 2017, more than 25 years 
after you wrote it?

A.35. As stated in my previous answer, my CV is constantly 
growing and evolving as I mature and my professional history 
grows longer and develops in new directions. When, as a Ph.D. 
student in political science, I had to prepare my academic CV 
for the first time, I was encouraged to include this type of 
information related to my undergraduate studies. The reference 
to my undergraduate diploma paper remained on my CV until I 
finally came around to a more thorough updating of my CV.

Q.36. How can you claim to have forgotten about your thesis in 
1989 after you wrote it but also have listed it on your resume 
as recently as 2017, which was only 4 years ago?

A.36. I wrote a paper as an undergraduate student living in an 
oppressive totalitarian system, on a topic that was not of my 
choosing. It was not anything a young person would care or 
think about, once the formal prerequisite for graduation was 
met.

Q.37. Why should Congress have faith in the credibility of the 
answers you give us now during your nomination process or in 
the future, if you are confirmed, you're your own resume 
contradicts your claim that you forgot about your thesis in 
1989?

A.37. My CV does not contradict my claims.

Q.38. Have ever provided a copy of your undergraduate thesis to 
any person or organization at any time since you wrote it? If 
so, to whom did you provide it and when?

A.38. No, I don't recall doing that.

Q.39. You studied at the University of Wisconsin initially as a 
foreign exchange student from Moscow State University and later 
as a student in the University of Wisconsin's Ph.D. political 
science program. Did you ever provide a copy of your Moscow 
State University undergraduate thesis on Marxism to the 
University of Wisconsin, including any professors at the 
University of Wisconsin?

A.39. No, I don't recall doing that.

Q.40. The University of Wisconsin may hold documents related to 
your academic studies, possibly including your undergraduate 
thesis. Will you complete the necessary privacy waivers 
required by the University of Wisconsin to release to the 
Banking Committee a copy of your undergraduate thesis if it is 
contained in the University of Wisconsin's files?

A.40. I am happy to contact the University of Wisconsin 
directly and inquire whether they are able to provide a copy of 
my 1989 undergraduate diploma paper, if the Senate Banking 
Committee requests that I take such action.

Q.41. Please provide your philosophy on how OCC will approach 
and respond to Congressional information requests (both for 
documentary information and oral testimony), if you are 
confirmed.

A.41. If confirmed, I pledge to work through the accommodations 
process to comply with Congressional requests for information 
consistent with the constitutional and statutory obligations of 
the Executive branch.

Q.42. If confirmed, do you intend to respond to information 
requests differently depending on who is making the 
Congressional information request (whether it's the chair of 
the Congressional committee, the Ranking Member, or another 
member of Congress)? Please answer ``yes'' or ``no.'' If your 
answer is ``yes,'' please explain.

A.42. I recognize that Congress plays an important oversight 
role regarding Executive branch activities, and I pledge to 
thoughtfully consider all Congressional information requests, 
recognizing the importance of transparency in Government. If 
confirmed, I pledge to work through the accommodations process 
to comply with Congressional requests for information 
consistent with the constitutional and statutory obligations of 
the Executive branch.

Q.43. Will you commit that, if confirmed, you will timely 
respond to and fully comply with all information requests from 
me? Please answer ``yes'' or ``no.'' If your answer is ``no,'' 
please explain.

A.43. I recognize that Congress plays an important oversight 
role regarding Executive branch activities, and I pledge to 
thoughtfully consider all Congressional information requests, 
recognizing the importance of transparency in Government. If 
confirmed, I pledge to work through the accommodations process 
to comply with Congressional requests for information 
consistent with the constitutional and statutory obligations of 
the Executive branch.

Q.44. Will you commit that, if confirmed, you will make 
yourself and any other OCC employee expeditiously available to 
provide oral testimony (including but not limited to briefings, 
hearings, and transcribed interviews) to the Committee on any 
matter within its jurisdiction, upon the request of either the 
Chairman or Ranking Member? Please answer ``yes'' or ``no.'' If 
your answer is ``no,'' please explain why.

A.44. I recognize that oral testimony plays an important role 
in Congress' oversight responsibilities regarding Executive 
branch activities. If confirmed, I commit to brief or testify 
regarding Congressional requests consistent with the 
constitutional and statutory obligations of the Executive 
branch.

Q.45. Do you believe that OCC may assert any privileges or 
other legal justifications to withhold information (whether 
records or oral testimony) from Congress? Please answer ``yes'' 
or ``no.''

A.45. I believe the OCC has to follow the applicable laws and 
appropriate procedures in sharing information.

Q.46. On October 7, 2021, the British newspaper the Daily Mail 
reported that you were a member of the Komsomol, the youth 
organization of the Communist Party of the Soviet Union, a fact 
you confirmed during questioning by Senator Kennedy at your 
nomination hearing. Senator Kennedy then asked you whether you 
had resigned from the Komsomol and you responded that ``at a 
certain age you automatically stopped being a member of that.''
    Other than being a member of the Komsomol, have you ever 
been a member of any Communist Party and/or Communist 
organization at any time in your life, including while you have 
lived in the United States? Please answer ``yes'' or ``no.''

A.46. I was born and spent the early part of my life in the 
Soviet Union, a totalitarian country run by its Communist 
Party. In 1991, I left the Soviet Union and came to the United 
States. Since 1991, I have not been affiliated with any 
Communist organization.

Q.47. If the answer is ``yes,'' please describe your 
involvement in every Communist Party and/or Communist 
organization that you have been a member of and list the name 
of such party/parties and/or organizations; the dates of your 
membership, including the month(s) and year(s) your 
membership(s) ended; the positions, if any, you held in such 
party/parties and/or organizations; and whether you were a 
member of such party/parties and/or organization(s) when you 
came to the United States in 1991.

A.47. As I said during the questioning at my nomination 
hearing, I am not a Communist and I do not subscribe to that 
ideology. I have not been affiliated with any Communist 
organizations or activities since 1991.
    The Soviet Union was a totalitarian regime where everybody 
had to be a member of a Communist organization, starting with 
the elementary school at the age of 7 and then progressing 
through a series of consecutive age-based organizational 
memberships. There was no freedom of political choice. 
Communist affiliation was a prerequisite for getting an 
education and pursuing a career, especially for ethnic 
minorities.
    I have been living in the United States for the last 30 
years, which is more than half of my life now. I was educated 
in the United States, practiced U.S. law at a prestigious law 
firm, and served in the George W. Bush administration. I teach 
law at a major American university. If confirmed as the 
Comptroller of the Currency, I will serve my country with 
utmost dedication and integrity. My early life experiences in 
the long defunct Soviet Union have no influence on my thinking, 
values, or actions.
                                ------                                


               RESPONSES TO WRITTEN QUESTIONS OF
             SENATOR MENENDEZ FROM SAULE T. OMAROVA

Q.1. Our financial industry has a diversity problem, especially 
at the highest levels. The proportion of minorities in 
financial services drops by 75 percent from entry level to the 
C-Suites. At highest level, 90 percent of the C-Suite is White. 
Women of color make up only 2 percent of executives despite 
being 21 percent of the entry-level workforce.
    As Comptroller, how would you help diversify financial 
institutions?

A.1. As a woman of color, I know from personal experience how 
important it is to promote diversity in the financial services 
sector. I believe that both the banking industry and its 
regulatory agencies should strive to reflect the richness and 
diversity of today's America.
    To achieve this goal in practice, all financial regulators, 
including the OCC, need to lead by example. If confirmed as the 
Comptroller of the Currency, I will work toward increasing 
diversity, both within the agency and within the national 
banking industry. I will work closely with the Office of 
Minority and Women Inclusion (OMWI) to identify and implement 
measures for improving the OCC's own recruitment and retention 
practices. I will also engage with the OCC Staff on finding new 
ways to encourage and facilitate greater diversity within the 
banking industry.

Q.2. Minority-owned small businesses are not just struggling 
with access to credit, but with attracting investment dollars. 
For example, Black and Latino business owners have obtained 
just 2.6 percent of venture capital funding. And while credit 
is important, minority-owned small businesses don't just need 
debt, they need investments.
    As Comptroller, how would you update the CRA to help ensure 
minority-owned small businesses get access to investment 
dollars, not just credit?

A.2. Ensuring safe and fair access to financial services and 
resources is a key part of the OCC's mandate. As we know, the 
COVID pandemic experience exposed many of our country's deep-
seated problems with unequal access to credit and capital, 
particularly among communities of color. Postpandemic, we 
cannot ignore the urgency of this problem.
    A critical civil rights-era law, the Community Reinvestment 
Act (CRA) is the OCC's principal tool of helping diverse 
populations and communities of color to create wealth and 
prosperity. The goal of the CRA is to guarantee the flow of 
credit and investment capital to the families and businesses in 
low- and moderate-income communities and communities of color 
all across America. I believe the OCC has to collaborate with 
other financial regulators to update the CRA Rule and to 
implement it in a way that effectively achieves that goal. A 
crucial part of this task is to support minority-owned banks 
(MDIs), CDFIs, and community banks in communities of color. It 
is also vital to encourage all banks to expand and diversify 
their investments in small businesses operating in, and 
projects directly benefitting, low-income communities and 
communities of color.
    If confirmed as the Comptroller, I will work closely with 
the FDIC, CFPB, the Federal Reserve, and State regulators to 
ensure that the modernized CRA Rule is implemented effectively 
and fairly, so that financial institutions of all sizes are 
able to channel more capital into minority-owned businesses and 
communities of color.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR WARNER
                     FROM SAULE T. OMAROVA

Q.1. Agency Management--The Office of the Comptroller of the 
Currency is a complicated agency, with thousands of employees 
and responsibility for overseeing banks that range in size and 
complexity from small community institutions to global banking 
powerhouses. Like any large and far-flung organization, the 
agency presents significant challenges in terms of both day-to-
day management and strategic operational planning.
    At your November 18 confirmation hearing you spoke in 
general terms of wanting to ``talk with people in the 
building'' before making decisions about new directions, but it 
would be helpful to hear specifics about your managerial 
approach.
    What kind of specific efficiency and other organizational 
goals would you pursue for the agency? Which goals would you 
prioritize given the inevitable constraints on agency 
resources? How should we in Congress measure your progress 
against those goals in order to ensure maximum accountability?

A.1. If confirmed as Comptroller, I would endeavor to conduct 
an in-depth ``listening tour'' and meet with the OCC's 
professional staff both at the agency's headquarters and in its 
offices across the country. My goal for the organization would 
be to sharpen the OCC's everyday focus on its core mission: 
ensuring the safety and soundness of the national banking 
system. Safeguarding the banking system against another 
financial crisis similar to the crisis of 2008, which 
devastated hard working American families, businesses, and 
community banks, will be my top organizational priority. As 
part of this agenda, I will strengthen the OCC's focus on 
supporting community banks that channel credit and provide 
vital services to their communities. If confirmed as 
Comptroller, I will guide the OCC's work to ensure that our 
banking system better serves the needs of ordinary Americans 
and the American economy. Congress should measure my progress 
in achieving these goals through this public policy lens.

Q.2. How, specifically, would you ensure that examiner training 
keeps up with the rapid technological innovation and market 
changes facing our regulated banks, particularly the smaller 
institutions that are the lifeblood of many American 
communities?

A.2. Examiner training plays a critical role in ensuring that 
the OCC professionals who work with national banks on a regular 
basis know what to look for when they are evaluating individual 
banks' risk management and business conduct.
    This is a particularly serious challenge in the context of 
today's rapid technological change that affects banking 
operations. If confirmed as Comptroller of the Currency, I will 
prioritize the task of improving and enhancing the quality and 
substantive scope of bank examiner training at the OCC. I will 
work closely with the OCC supervisory staff to identify 
specific gaps in the current knowledge and examiner tool kit, 
as well as the most effective ways of addressing these gaps. I 
will seek to ensure that OCC examiners fully understand both 
the potential benefits of innovative technologies for 
increasing and supporting the ability of community banks to 
channel more credit into the American economy and the potential 
risks these technologies may pose to the safety and soundness 
of our banking system.

Q.3. Anti- Money Laundering and Financial Crime--The Anti- 
Money Laundering Act of 2021 calls for key reforms of our 
monitoring and enforcement systems for combatting money 
laundering, terrorism financing, and other financial crimes.
    How, specifically, would you approach operationalizing the 
changes called for in that Act?

A.3. If confirmed to be the Comptroller of the Currency, I will 
work closely with Treasury's FinCEN, the FDIC, the Federal 
Reserve, and State regulators to ensure that we appropriately 
and seamlessly implement the Anti- Money Laundering Act of 2021 
enacted by Congress.

Q.4. Members of Congress often find significant disconnects 
between what agency leaders say on enforcement issues at a high 
level, and what we hear from institutions on the ground when 
their examiners come in. Financial crime can be an especially 
difficult area in this regard, particularly for smaller 
community banks. Ultimately we need to focus all of our 
financial crime efforts on providing information that is 
genuinely useful to law enforcement and the intelligence 
community.
    As the AMLA is implemented, how will you ensure that 
examiners have the knowledge and direction needed to implement 
its risk-based approach successfully?

A.4. As mentioned in my response to an earlier question, if 
confirmed as Comptroller, I intend to start by meeting with the 
OCC's professional staff, both at the agency's headquarters and 
across the country. During these meetings, I would pay special 
attention to what national bank examiners see as key issues 
with ensuring not only effective but also appropriately 
targeted approach to catching money-launderers and other 
perpetrators of financial crimes. In addition, I would engage 
in a candid conversation with the industry, especially 
community banking industry, to develop a better understanding 
of the specific difficulties smaller institutions encounter in 
this area. I would also reach out to other regulatory and 
enforcement agencies, to discuss their experiences and 
approaches to ensuring effective implementation of anti- money 
laundering laws and regulations. These actions should inform 
the development of a concrete risk-based strategy of AMLA 
implementation.

Q.5. What new initiatives would you undertake to improve 
coordination of OCC efforts with those of enforcement agencies 
like FinCEN, and with the intelligence community?

A.5. I take financial crime and related cybersecurity risks 
very seriously. If confirmed as the Comptroller of the 
Currency, I would work collaboratively with the other 
regulators, like FinCEN, on identifying and addressing the 
biggest risks facing the banking industry in these areas. As 
part of this commitment, I would engage in extensive 
discussions with the OCC staff and with our colleagues at 
FinCEN and other enforcement agencies on specific ways to 
improve coordination of our joint efforts on an ongoing basis.

Q.6. Wealth Gap/LIFT Act--The racial wealth gap has been 
growing for decades in our country, and accelerated most 
recently due to the economic dislocations of the pandemic. As 
you may know, I have been working on the Low-Income First-Time 
Homebuyers (LIFT) Act, a bill to increase savings dramatically 
among first-time, first generation homebuyers, who are 
predominantly people of color. The bill, now moving forward as 
part of the Build Back Better legislation, would do this by 
offering eligible buyers a 20-year mortgage instead of the more 
traditional 30-year, allowing them to build equity--and thus 
wealth--roughly twice as rapidly.
    Have you reviewed the proposal and, if confirmed, how would 
you leverage the resources of the OCC to raise awareness of the 
program, and ensure that our banks help their customers take 
full advantage of it?

A.6. I am familiar with your proposed Low-Income First-Time 
Homebuyers (LIFT) Act, which would establish a new program to 
help first-time, first-generation homebuyers. It is an 
important proposal that aims to assist low-income Americans, 
predominately Americans of color, buy a home and ideally build 
wealth much more rapidly than they are able to do now. I 
support this policy goal. If confirmed as Comptroller, I would 
be happy to work with you and with my colleagues at the 
Treasury Department and the Department of Housing and Urban 
Development (HUD) to implement this legislation, once it is 
signed into law.

Q.7. What other specific measures can the OCC take in order to 
help address the growing wealth gap more broadly?

A.7. Ensuring safe and fair access to credit is one of the key 
priorities of the OCC. Recently, the COVID pandemic exposed the 
full depth and dire consequences of the wealth gap in today's 
America, the richest and most powerful country in the world. If 
confirmed, I will work closely with the FDIC, CFPB, the Federal 
Reserve, and State regulators to expand the flow of safe and 
affordable credit and investment into communities of color, 
low-income communities, and other traditionally underserved 
segments of rural and urban populations.
    One of the OCC's principal tools in this respect is the 
power to supervise and assess national banks' compliance with 
the Community Reinvestment Act (CRA). I believe the OCC has to 
collaborate with other financial regulators to update the CRA 
Rule and to implement it in a way that helps to close the 
existing wealth gap in practice. A big part of this task 
involves providing greater support to community banks as the 
main source of financial opportunity for hardworking American 
families and underserved communities across the country.

Q.8. Digital Assets--There are clearly benefits to the spread 
of digital assets, and I believe strongly that U.S. companies 
can and will continue to lead as these products and markets 
develop. However, their rapid proliferation raises a number of 
concerns with regard to financial crime, systemic stability, 
and monetary policy. A new, unregulated shadow financial system 
will not serve us well as a country, and I fear we have fallen 
behind other markets in providing a comprehensive, thoughtful 
regulatory approach to these technologies. The Treasury 
Department took a solid step in the right direction recently, 
issuing a report on stablecoins from the President's Working 
Group on Financial Markets.
    Given your academic engagement on these issues, as 
Comptroller how would you have the agency participate in 
implementing the recommendations proposed in the report?

A.8. My academic research on digital assets points to the 
utmost importance of cross-agency cooperation and collaboration 
in this area. I fully agree with the need to develop a 
comprehensive and thoughtful regulatory approach to these new 
products and markets. The publication of the President's 
Working Group (PWG) report is a welcome development in this 
direction. If confirmed as the Comptroller of the Currency, I 
would work closely with the Treasury Department, the Federal 
Reserve, and other agencies included in the PWG toward 
establishing an effective framework for regulating digital 
assets in a way that safeguards the stability and healthy 
functioning of our financial system.

Q.9. Are there areas in which you think the recommendations 
could go further in the interests of consumer protection?

A.9. As banks and other regulated financial firms consider 
offering their clients and customers services related to 
cryptocurrencies and digital assets, it becomes even more 
important for financial regulators to identify the emerging or 
changing patterns of risk to retail consumers. Because digital 
assets are so diverse and evolve so rapidly, it is difficult to 
predict specific forms such risks would take and to pinpoint 
specific measures that would address them. As a general matter, 
I believe that one of the PWG's main achievements in issuing 
this report is that it establishes a common foundation on which 
the regulators can build a fuller set of coordinated approaches 
and recommendations.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                     FROM SAULE T. OMAROVA

Q.1. It is my understanding that you opposed the Economic 
Growth, Regulatory Relief, and Consumer Protection Act, known 
as S.2155. This bill passed the House and the Senate with 
bipartisan majorities. Could you explain your opposition to 
this law?

A.1. I did not write in opposition to S.2155.
    On June 15, 2017, I testified before the Senate Banking 
Committee at a hearing titled, ``Fostering Economic Growth: 
Midsized, Regional and Large Institution Perspective''. At that 
hearing, I was not remarking on S.2155, which was not 
introduced until November of 2017. Instead, I expressed my 
concern over the largest financial institutions' general 
efforts to dismantle the key systemic-stability provisions of 
the Dodd-Frank Act. I explicitly supported the need to tailor 
regulations for, and ease the regulatory burden on, community 
banks and other small-size, low-risk financial institutions 
that provide essential credit to small businesses and hard-
working American families.
    The Economic Growth, Regulatory Relief, and Consumer 
Protection Act is now the law of the land. If confirmed, I will 
work to implement this law in full accordance with what 
Congress intended it to do: make it easier for community and 
mid-size banks to channel credit into the real economy.

Q.2. In a Cornell Law publication entitled ``Dealing with 
Disruption: Emerging Approaches to Fintech Regulation'', you 
write about the pros and cons associated with the introduction 
to fintech. Your analysis states that fintech provides ``a 
unique set of opportunities to correct the destabilizing 
structural asymmetry between private actors' freedom to 
generate financial risks and the sovereign public's ability to 
accommodate them'' but cautions that such technology could also 
``further magnify this asymmetry and thus exacerbate the 
financial system's present dysfunctions.''
    If confirmed, what frameworks, analyses, and/or criteria 
would you employ to make these types of qualitative judgments 
about financial technology in the context of carrying out the 
duties and responsibilities of the OCC?

A.2. If confirmed as the Comptroller of the Currency, I would 
approach issues related to new financial technologies with an 
open mind and through the lens of the OCC's statutory mandate: 
preserving the safety, soundness, and competitiveness of the 
national banking system. I believe in responsible innovation, 
which is critical to banking institutions' ability to serve the 
needs of American businesses, communities, and families more 
effectively and inclusively.
    This is especially important for community and mid-size 
banks that are under an increasing pressure to compete with 
financial service providers not subject to the same 
regulations. The OCC's mandate requires that it ensure a level 
playing field for community and mid-size banks, so that they 
can take full advantage of technological innovation.
    Before arriving at a specific judgment on any specific 
financial technology, I would engage closely with the OCC Staff 
working in the relevant areas, industry and academic experts, 
consumer advocates, and other stakeholders. I would also reach 
out to and seek input from other Federal and State regulators, 
to ensure consistency and understanding of the issues involved.
                                ------                                


       RESPONSES TO WRITTEN QUESTIONS OF SENATOR WARNOCK
                     FROM SAULE T. OMAROVA

Q.1. Small community banks are vital to communities in my State 
of Georgia. They offer localized relationship-based services to 
their Georgia customers, and utilize local deposits to offer 
local services to local small businesses and families. How do 
you view the OCC's role in regulating community banks and the 
kind of relationships that must be maintained between a 
regulator and institutions to operate effectively?

A.1. I believe that community banks engaged in traditional 
relationship-based lending are the true heart of the American 
banking system. They play a critical role in channeling credit 
to hard-working families, rural and poor urban communities, and 
small businesses. That's what makes community banks 
indispensable to our country's economic growth and prosperity.
    If confirmed as the Comptroller of the Currency, I will 
approach the oversight of community banks from a pragmatic and 
risk-based perspective. I believe that the traditional 
relationship lending business does not pose the same kinds of 
systemic risk as dealing and trading in complex financial 
instruments, typically conducted by the largest institutions. I 
therefore support tailoring the regulatory and supervisory 
oversight of community banks to their lower risk profiles, in 
order to avoid the imposition of unnecessary regulatory burden 
on the very banks that create local jobs and generate economic 
growth.
    Over the last several decades, we have seen both the share 
of deposits held at community banks and the absolute number of 
community banks in operation decline dramatically. I believe an 
important factor in that decline was an erosion of a level 
playing field in the context of rapid technological change and 
uncertain economic environment. It is important for the OCC to 
ensure fair competition, maintain a level playing field for 
community banks, and to work with them to promote responsible 
innovation.
    If confirmed, I will maintain an open-door policy and work 
with the OCC Staff on addressing community banks' concerns 
effectively and efficiently.

Q.2. What are your views toward bank activities with 
cryptocurrency, or other digital assets, and do you see a role 
for banks in this market?

A.2. Like all new technologies, cryptocurrency offers many 
potential benefits while also creating potential risks, from a 
public policy perspective. We need to embrace the beneficial 
potential of cryptotechnology, particularly with respect to 
promoting financial inclusion, access, and market efficiencies. 
At the same time, it is crucial to remain vigilant in 
protecting the long-term stability and fairness of our 
financial system. Our financial system is what makes our 
American economy and the U.S. dollar the most powerful and 
influential in the world. As banks and other regulated 
financial firms consider offering their clients services 
related to cryptocurrencies and digital assets, they must be 
more acutely aware of the heightened cybersecurity risks and 
risks related to money-laundering and other illegal activities. 
This is increasingly also a matter of our national security. 
Accordingly, the OCC and other financial regulators need to 
work with banks and other financial institutions to identify 
and evaluate key potential risks and benefits of digital assets 
and cryptotechnologies.

Q.3. I am concerned about how responsible consumer credit can 
function to meet the needs of Georgians. On one hand, there is 
clearly a need to for access to credit for hardworking Georgia 
families who, for whatever reason, are not able to secure 
enough savings to cover financial emergencies, but on the other 
hand, I do not want Georgians--or anyone else for that matter--
to get trapped into cycles of debt. How do you view banking 
policy and the role of the OCC coming together on this issue?

A.3. Ensuring safe and fair access to credit is one of the key 
priorities of the OCC. The COVID pandemic has exposed many of 
the long-standing problems with unequal access to financial 
services, especially for communities of color, low-income 
communities, and other traditionally underserved segments of 
rural and urban populations.
    If confirmed, I will work closely with the FDIC, CFPB, the 
Federal Reserve, and State regulators to ensure that we 
appropriately and seamlessly enforce the consumer protection 
and fair lending laws enacted by Congress.
    One of the OCC's principal tools for ensuring safe and fair 
access to credit is the power to supervise and assess national 
banks' compliance with the Community Reinvestment Act (CRA). I 
believe the OCC has to collaborate with other financial 
regulators to update the CRA Rule and to implement it in a way 
that effectively achieves that goal. A crucial part of this 
task is to support community banking as the main source of 
financial opportunity for hardworking American families and 
underserved communities across the country, regardless of 
wealth, geography, or history.

Q.4. What work would you do to ensure that banks and fintechs 
under the OCC's oversight won't be able to utilize loopholes to 
get around Georgia's existing consumer protection laws?

A.4. As we saw in the financial crisis of 2008, Federal 
financial regulators' failure to respect the role and mission 
of State regulators was one of the main contributing factors to 
the near-collapse of our financial markets. As you know, 
Georgia imposed strict regulations on subprime lending 
activities prior to the 2008 crash. This is an example of the 
built-in advantages of our uniquely resilient dual-banking 
system.
    If confirmed as the Comptroller of the Currency, I will 
take the lessons of the past to heart and will work closely 
with State regulators to ensure effective and strong 
enforcement of consumer protection laws and principles.

Q.5. This summer, the Federal banking agencies committed to 
working together on a joint rulemaking that modernizes the 
regulations implementing the Community Reinvestment Act. What 
should a modernized regulatory framework entail and, in 
particular, how would your ideas be applied to community banks 
without overly burdening them?

A.5. The Community Reinvestment Act (CRA) is a critical civil 
rights-era law that ensures that all communities--especially, 
low- and moderate-income (LMI) communities, communities of 
color, and rural communities--have access to banking services 
and benefit from local investment.
    There is a need for comprehensive reform to modernize the 
framework for CRA regulations, in order to enable banking 
institutions to fulfill their CRA obligations most effectively 
and efficiently. If confirmed, I will engage closely with the 
OCC Staff and all other Federal financial regulators to develop 
and implement a cohesive and comprehensive CRA assessment 
framework.
    It is important to have a balance in recognizing how 
technological change affects provision of banking services and 
credit, while also retaining and strengthening the substantive 
focus on the CRA's original goal of serving the needs of the 
actual communities. Physical presence is especially important 
in the currently underserved rural areas, on Tribal lands, and 
in low-income urban communities and communities of color--so-
called banking deserts. Community banks are the primary 
providers of financial services to these underserved 
communities, and it is critical to facilitate community banks' 
efforts to expand their presence and ability to reach their 
customers. I believe that, in this context, the OCC's efforts 
to support responsible innovation and growth of community 
banking is an indispensable part of fulfilling the CRA's 
promise in the 21st century.
              Additional Material Supplied for the Record
 LETTERS SUBMITTED IN OPPOSITION TO THE NOMINATION OF SAULE T. OMAROVA
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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