Partisan warfare has erupted over Richard Cordray, Obama’s nominee to lead a new consumer finance watchdog, whom Republicans filibustered in the Senate last week, raising concerns that the agency would become a “Stalinist” enemy of Wall Street. But waiting in the wings is another Obama nominee who’s long raised hackles of the country’s biggest financial institutions. And this time, Republicans have resoundingly embraced him.

Thomas Hoenig, former president and chief executive officer of the Federal Reserve Bank of Kansas City. (Bloomberg)

Hoenig, however, is neither a by-the-book conservative nor a milquetoast bureaucrat. He is a long-standing unabashed critic of big banks that pose a systemic risk to the financial system. As early as 1999, Hoenig warned that increasingly large, complex banks were being protected by implicit government guarantees — and posed a major threat to stability. He now believes that Dodd-Frank doesn’t go far enough in preventing “too big to fail” and future taxpayer-funded bailouts. Over the summer, Hoenig described the very existence of such banks — so-called Systemically Important Financial Institutions (SIFIs) — as an anathema to capitalism itself. In June, he wrote:

The problem with SIFIs is they are fundamentally inconsistent with capitalism. They are inherently destabilizing to global markets and detrimental to world growth. So long as the concept of a SIFI exists, and there are institutions so powerful and considered so important that they require special support and different rules, the future of capitalism is at risk and our market economy is in peril.

Instead, Hoenig proposes a return to Glass-Steagall-type boundaries that would separate commercial banking — making loans, taking deposits, etc. — from investment banking, with a strong government safety net for the former but not the latter. Wall Street reform puts some new restrictions on the kind of speculative trading that commercial banks are allowed to conduct, but “to more fundamentally address this issue, we must go beyond today’s Dodd-Frank,” he concludes.

Hoenig wouldn’t be able to implement such far-reaching changes himself, even if he’s confirmed to the new post. But at the FDIC, he will have some new tools at his disposal. Under Dodd-Frank, financial institutions will have to explain to the government how they would be liquidated if their financial survival were imperiled. The FDIC will be responsible for examining such “living wills,” but it’s unclear whether and how federal officials would force banks to restructure if their demise would pose too much of a threat to the entire financial system. If Hoenig is at the helm, the FDIC is more likely to be an aggressive regulator. And if the FDIC doesn’t have enough authority to put pressure of “too big to fail” banks, expect Hoenig to speak out about it.

To be sure, some Senate Republicans have been a bit wary about Hoenig’s vendetta against big, systemically risky banks, as the Wall Street Journal reports, citing concerns from large banks and other industry players. But some of Hoenig’s other strong views seems to have appeased those on the right: Like many conservatives, Hoenig has criticized the Fed’s “quantitative easing” policy and its decision to keep interest rates extremely low. Meanwhile, some of Hoenig’s GOP supporters even cite his contrarian views as a reason to support his nomination to the point. “It’s always appealing to me that while his positions are thoughtful they have not always been popular,” Sen. Jerry Moran (R-Kan.) said during a November hearing on Hoenig’s confirmation. “We as elected officials could learn something from that role model.”