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The transition team for President-elect Trump is exploring significant changes to the regulatory banking framework, including eliminating or consolidating top agencies such as the Federal Deposit Insurance Corporation (FDIC).

These discussions stem from broader objectives to streamline government and ease financial oversight, led by a new Department of Government Efficiency.

What are some of the proposed actions?

Based on transition interviews with potential nominees and draft policy documents, proposed actions include:

• Merging the FDIC, the Office of the Comptroller of the Currency (OCC) and nonmonetary functions of the Federal Reserve.
• Transitioning the FDIC’s deposit insurance functions to the Treasury Department.
• Substantially restructuring or eliminating the Consumer Financial Protection Bureau (CFPB).

How would these changes affect banks?

A regulatory overhaul in the banking industry could:

• Relax regulations and consumer protections.
• Lower scrutiny over industry consolidation.
• Lead to significant job cuts across regulatory agencies and stricter return-to-office policies.
• Create competitive risks for smaller banks, if they lose insurance protections.

What’s next?

Such changes would require both congressional approval and industry support. With Republicans holding only thin majorities in the Senate and House next year, congressional dynamics could make the proposals infeasible.

A major cabinet-level agency has never been shut down, so there’s no precedent for an overhaul of this magnitude. Past attempts to consolidate regulators have faced significant hurdles, with major changes typically only occurring during financial crises.

How Wipfli can help

Wipfli can help you answer the “what-ifs.” Our financial services advisory team is ready to help you adapt to new challenges, find ways to mitigate risk and uncover opportunities. Get the advice and perspective you need today. Visit our financial institutions page to contact us or learn more.