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Trump’s Deregulation Plans: Could FDIC Face the Axe?
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The financial world is abuzz with talk about what might happen with regulations under President-elect Donald Trump. His transition team is reportedly looking into ways to streamline, combine, or possibly dismantle some major banking regulatory agencies. Eliminating any federal agency would need Congress’s approval, which might be hard to secure given the sweeping nature of such changes.
Considering Changes in Regulation
According to sources mentioned by the Wall Street Journal, Trump’s advisers have met with potential leaders of banking regulatory agencies to discuss the possibility of doing away with the Federal Deposit Insurance Corp. (FDIC). They explored whether the deposit insurance role could be shifted to the Treasury Department if the FDIC were to be dissolved. These discussions included members of the new Department of Government Efficiency (DOGE).
Possible Agency Overhauls
Conversations with candidates for roles at the FDIC and the Office of the Comptroller of the Currency (OCC) also delved into how these agencies might be combined or restructured alongside the Federal Reserve. One idea was to appoint a single agency—whether the FDIC, the OCC, or parts of the Fed—to handle bank regulation. Elon Musk, who is co-leading DOGE, has recently called for the elimination of the Consumer Financial Protection Bureau, criticizing its limits on bank overdraft fees.
Industry Hopes and Market Impact
The banking industry is hopeful for lighter regulatory demands under Trump’s administration. JPMorgan CEO Jamie Dimon expressed that banks are looking forward to relief from stringent regulations, which he believes have previously hampered credit availability. This optimism is echoed by SA analyst MacroGirl, who predicts that expectations of deregulation could further boost bank stocks, reflecting the post-2016 election surge driven by hopes for higher earnings rather than actual policy shifts. Jonathan Weber, an Investing Group Leader, has remarked on Trump’s past deregulation efforts and speculates that he may follow a similar path if given another term.