The Trump transition team is considering ways to shrink, consolidate or eliminate bank regulators in Washington, D.C., a move that would have a massive impact on agencies in charge of protecting consumers' money, according to The Wall Street Journal.
One of the ideas involves getting rid of the Federal Deposit Insurance Corp. In interviews with candidates to lead the FDIC and the Office of the Comptroller of the Currency (OCC), Trump advisers are asking if the president-elect would have the power to abolish the FDIC and whether deposit insurance could be absorbed into the Treasury Department, the publication reported.
The U.S. economy relies heavily on FDIC deposit insurance to maintain Americans’ confidence in the financial system, with the insurance protecting their money in the event of a bank failure. According to the FDIC, “no depositor has lost a penny” since the agency was founded in 1933.
A plan to eliminate bank regulators would require approval from Congress, The Wall Street Journal noted.
The proposal echoes Project 2025, a playbook of recommendations that calls for restructuring federal bank regulators. It would potentially merge the FDIC, the OCC, the nonmonetary policy parts of the Federal Reserve and the National Credit Union Administration.
Tesla CEO Elon Musk, a co-leader of a nongovernmental advisory group Trump created to slash spending, has pushed for the elimination of the Consumer Financial Protection Bureau, a frequent target of Republicans.
FDIC chair Sheila Bair told The Wall Street Journal that any proposal to abolish a bank regulator would have a hard time gaining support from both Congress and the bank industry.
“Banks may complain, but at the end of the day, they like to have their own regulator they have a relationship with,” Bair said. “They like the status quo.”
