Donald Trump’s transition team is reportedly exploring whether the incoming president’s administration can slim down, lump together, or even cut banking regulators.
President-elect Trump’s advisers from the partly Elon Musk-led Department of Government Efficiency have asked in interviews with potential bank regulator picks if a president could, for example, abolish the Federal Deposit Insurance Corporation (FDIC), people familiar with the matter told The Wall Street Journal for a Dec. 12 report.
Trump’s advisers have also queried potential picks for 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 be the decider on whether the FDIC or any other agency gets the boot — 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 president-elect’s inauguration.
Representative Tom Emmer had 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
Musk last month wrote on his X platform that “there are too many duplicative regulatory agencies” and called to “delete” the Consumer Financial Protection Bureau (CFPB) — created in the wake of the global financial crisis caused by predatory bank lending and a lack of regulatory oversight.
Source: Elon Musk
The Journal’s report comes 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 the agency asked firms to “pause all crypto asset-related activity” and “refrain from providing” or “expanding” crypto products and services.
Magazine: Crypto has 4 years to grow so big ‘no one can shut it down’ — Kain Warwick, Infinex
