Trump team seek ways to slim or abolish banking regulators: WSJ

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As a seasoned researcher with a background in economics and politics, I find these reports intriguing, to say the least. The proposed changes to banking regulators under President-elect Trump’s administration are indeed significant and could potentially reshape the financial landscape.

Reports suggest that Donald Trump’s advisors are considering ways to streamline, consolidate, or potentially eliminate certain financial regulatory bodies within his future administration.

It has been reported by sources close to the matter that advisors from the Government Efficiency department, led in part by Elon Musk and associated with President-elect Trump, have posed questions during interviews with potential nominees for bank regulator positions about whether a president possesses the authority to dissolve institutions such as the Federal Deposit Insurance Corporation (FDIC).

Trump’s advisors have likewise questioned prospective appointments for the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of theCurrency about the possibility of integrating bank deposit insurance within the Department of the Treasury.

Plans to combine or overhaul the FDIC, OCC, and the Federal Reserve have also been floated.

As a researcher, I find myself delving into the intricacies of the situation, where it’s essential to understand that a Republican-controlled Congress holds the power to determine if the Federal Deposit Insurance Corporation (FDIC) or any other agency is dissolved – a process that is both complex and infrequently carried out.

In the meantime, Trump has been given the go-ahead to choose a new appointee to take over from Martin Gruenberg, who previously announced his retirement effective January 19 – just one day prior to the incoming president’s inauguration.

In simpler terms, Representative Tom Emmer alleges that Gruenberg is the mastermind behind “Operation Chokepoint 2.0,” which is said to be a covert plan by the Biden administration aimed at disrupting the connections between the cryptocurrency sector and traditional banking systems.

The discussions suggest a focus on Trump’s pledges for deregulation and significant reductions in government spending – a role assigned to both Elon Musk and former Republican presidential candidate Vivek Ramaswamy, who are jointly leading the DOGE initiative.

In recent times, Elon Musk expressed his viewpoint on his X platform that there are too many overlapping regulatory bodies and advocated for the elimination of the Consumer Financial Protection Bureau (CFPB). This bureau was established post the global financial crisis, which was triggered by predatory lending practices by banks and a perceived absence of proper regulatory supervision.

Today’s Journal report coincides with a Washington D.C. federal judge’s criticism, in a lawsuit backed by Coinbase under the Freedom of Information Act (FOIA), against the FDIC for extensively blacking out certain “pause letters” they sent to banks.

The FDIC has been instructed to “exercise greater care in editing out sensitive information,” resubmit the letters by January 3, and “be ready to justify every redacted section.

The correspondence reveals that the FDIC inquired into the cryptocurrency operations of 23 financial entities, with a few institutions receiving instructions from the agency to halt all activities involving cryptocurrencies, and abstain from offering or expanding their cryptocurrency products and services.

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2024-12-13 08:06