The Trump transition team is reportedly considering a plan to consolidate the authority of various government agencies responsible for overseeing the banking industry. This initiative, as per sources familiar with the matter, aims to streamline regulatory functions and potentially reduce the scope of certain agencies.
One key aspect of the discussion involves the Federal Deposit Insurance Corporation (FDIC), which safeguards consumers' funds in basic bank accounts. There have been talks among Trump allies about transferring oversight of deposit insurance from the FDIC to the Treasury Department, which could lead to significant downsizing or even closure of the FDIC.
Additionally, there are proposals to shift the non-monetary responsibilities of the Federal Reserve to the Office of the Comptroller of the Currency and to restructure the Consumer Financial Protection Bureau.
The blueprint for these potential changes is outlined in Project 2025, a comprehensive white paper published by the Heritage Foundation. The document suggests merging the Office of the Comptroller of the Currency, the FDIC, the National Credit Union Administration, and certain regulatory functions of the Federal Reserve to create a more efficient regulatory framework.
However, implementing such a transformation is expected to face significant challenges. Altering an agency's statutory authority or abolishing it altogether would necessitate bipartisan legislation in Congress, a process that has historically encountered strong opposition.
For instance, past attempts to modify the regulatory powers of the Federal Reserve during the negotiations for the Dodd-Frank financial reforms were unsuccessful. Concerns were raised about potential job losses at the state level, leading to the proposal's eventual failure.
