Donald Trump’s United States presidential transition team is reportedly exploring whether the incoming administration can slim down, lump together or even do away with some banking regulators.
Advisers to the president-elect from the Elon Musk-led Department of Government Efficiency (DOGE) have asked in interviews with potential bank regulators if a president could, for example, abolish the Federal Deposit Insurance Corporation (FDIC), people familiar with the matter told The Wall Street Journal in a Dec. 12 report.
Trump’s advisers have also queried potential appointees to the FDIC and the Office of the Comptroller of the Currency if bank deposit insurance could be folded into the Treasury.
Plans to combine or overhaul the FDIC, OCC and the Federal Reserve have also been floated.
The Republican-majority Congress would decide whether the FDIC or any other agency is to be eliminated — a complex and rare undertaking.
Trump, meanwhile, is cleared to pick a successor to replace outgoing FDIC Chair Martin Gruenberg, who said last month he would retire on Jan. 19, a day before the new president is inaugurated.
Representative Tom Emmer has accused Gruenberg of being the “architect of Operation Chokepoint 2.0,” a rumored Biden administration scheme to cut off the crypto industry from banks.
The reported talks seem to underscore Trump’s promises of deregulation and massive government spending cuts — an initiative tasked to Musk and failed GOP presidential candidate Vivek Ramaswamy, who will co-lead DOGE.
Related: New SEC boss Paul Atkins will transform crypto… but not right away
Last month, Musk wrote on his X platform that “there are too many duplicative regulatory agencies.” He also called to “delete” the Consumer Financial Protection Bureau (CFPB), which was created in the wake of the 2008 global financial crisis that was caused by predatory bank lending and a lack of regulatory oversight.
Source: Elon Musk
The Journal’s report came the same day a Washington, DC, federal judge in a Coinbase-backed Freedom of Information Act (FOIA) suit criticized the FDIC for heavily redacting so-called “pause letters” it sent to banks.
The FDIC was told to “make more thoughtful redactions,” re-file the letters by Jan. 3 and “be prepared to defend each new redaction.”
The letters show the FDIC asked 23 financial institutions about their crypto-related activities, with some detailing that the agency had asked firms to “pause all crypto asset-related activity” and “refrain from providing” or “expanding” crypto products and services.
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