WASHINGTON—In line with its anti-regulation stance, the Trump transition team is reportedly seeking ways to markedly shrink, consolidate or even eliminate the top bank watchdogs in Washington, The Wall Street Journal reported.
“In recent interviews with potential nominees to lead bank regulatory agencies, President-Elect Donald Trump’s advisers and officials from his newfound Department of Government Efficiency have, for example, asked whether he could abolish the Federal Deposit Insurance Corp., people familiar with the matter said,” the Journal reported. “Advisers have asked the nominees under consideration for the FDIC, as well as the Office of the Comptroller of the Currency, if deposit insurance could then be absorbed into the Treasury Department, some of the people said.”
Any proposal to eliminate the FDIC or any agency would require congressional action, the Journal noted.
“While past presidents have reorganized and rebranded departments, Washington has never shut down a major cabinet-level agency and rarely closed other agencies like the FDIC that are not,” the Journal said.
The Journal said bank executives are optimistic that Trump will ease a host of regulations on capital cushions and consumer protections, as well as scrutiny of consolidation in the industry.
“But FDIC deposit insurance is considered near sacred. Any move that threatened to undermine even the perception of deposit insurance could quickly ripple through banks and in a crisis might compound customer fears,” the Journal said.
The Journal said the discussions underscore the drastic approach Trump could take in his attempt to slash the size of the government and ease oversight, including for the highly regulated financial industry.