But most of us, I would guess, realize that the United States faces an overdue reckoning with how we’ve treated non-White Americans, such as the fact that for every dollar a White family with children possesses, a Black family with children has just 1 cent, while Hispanic families with children have 8 cents. The OCC is well positioned to help change this reality, as it implements and enforces laws on everything from fair housing to credit access in low- and moderate-income neighborhoods. And there is a perfect candidate to lead the agency: Mehrsa Baradaran.
A law professor at the University of California at Irvine, Baradaran has spent her career explaining how financial injustice happens, why it persists and how to fix it. She understands that financial inclusion is central to the story of how people get ahead in America — and how financial exclusion keeps all too many down. She wrote “How the Other Half Banks,” a book about how banks ignore lower-income Americans, and the costs to both individuals and society of leaving millions without access to banking services. Her most recent book, “The Color of Money,” describes the American banking system’s long role in the racial wealth gap. “The hand that drives Black poverty is not a natural and invisible one,” she writes, “but rather the coercive hand of the state that has consistently excluded Blacks from full participation in American capitalism.”
Baradaran is now one of two finalists for the job of OCC for the Biden administration, and progressive organizations are pushing hard for her. But a few weeks ago, word leaked that President Biden would appoint as comptroller Michael Barr, an assistant treasury secretary in the Obama administration and the favored candidate of the Washington and financial establishments.
On the positive side, Barr was central to the creation of the Consumer Financial Protection Bureau during negotiations over the Dodd-Frank Act. But Barr has been accused of helping to water down other portions of the law, and he played a key role in the troubled Home Affordable Modification Program. Designed to help keep underwater homeowners in their homes, HAMP instead became a way for big banks to force foreclosures on the people the program was supposed to aid. A disproportionate number of the millions of homeowners who lost homes to foreclosure during the financial crisis were Black and Latino — a large part of the reason the Black-White wealth gap is the same today as it was in 1968.
There is another issue, too. The OCC is expected to continue tackling the challenge of regulating the ever-burgeoning financial apps and online platforms of the fin tech sector, including reviewing and possibly unraveling Trump-era actions. Given that, after he left the Obama administration, Barr worked for several fin tech companies and associated venture capital firms, his appointment to regulate this industry would be a classic example of the Washington “revolving door.”
Baradaran, on the other hand, is skeptical of the fin tech sector’s claim that its mere existence broadens financial access, and concerned that regulations issued by the OCC are permitting fin tech actors to masquerade as banks without the strictures, rules and consumer protections banks need to observe.
Baradaran would bring other advantages to the OCC. She’s neither a dry academic, nor a government technocrat. She speaks and writes in an accessible style and would likely engage the public in a way few financial regulators are able to do. She could use the position not simply as a regulatory one but as a bully pulpit. Finally, she’s far from a child of privilege — she came to the United States as a refugee from Iran as a young child.
Critics complain Baradaran doesn’t have the hands-on government experience an OCC head needs. But, besides the fact that capable deputies would help out with that, it’s exactly her outsider status — as a woman, as an immigrant, as someone from outside the usual pool of Washington insider candidates — that makes her so perfect for this job. Are you listening, President Biden?