The Blubber

President-elect Donald Trump's transition team is reportedly exploring substantial changes to the structure of federal bank regulators, including reductions, mergers, or even the elimination of key agencies, according to the Wall Street Journal. Sources familiar with the matter indicate that Trump’s advisers, in collaboration with the newly created Department of Government Efficiency (DOGE), have discussed options such as dissolving the Federal Deposit Insurance Corporation (FDIC).

The discussions reportedly involve transferring deposit insurance responsibilities to the Treasury Department. Any such move would require congressional approval. Advisers have posed these questions to nominees being considered for positions at both the FDIC and the Office of the Comptroller of the Currency (OCC), according to the report.

The FDIC, OCC, Treasury Department, and Trump’s transition team have not provided immediate comment on the matter.

Trump has appointed entrepreneurs Elon Musk and former Republican presidential candidate Vivek Ramaswamy to co-lead DOGE, a task force aimed at overhauling the federal government, which spent $6.8 trillion in the last fiscal year. This new entity is expected to operate independently of traditional government structures.

Treasury Secretary nominee Scott Bessent and DOGE officials have been involved in interviews with potential appointees for bank regulatory roles. Musk, already tasked with identifying government cost-saving measures, has advocated for eliminating the Consumer Financial Protection Bureau (CFPB), amplifying his role as a key influencer in Trump’s administration. Musk, one of Trump's significant donors, has also voiced plans for a reduction in regulatory oversight.

Advisers are also reportedly weighing restructuring options for federal banking oversight, including merging the FDIC, OCC, and parts of the Federal Reserve. Another scenario under consideration would maintain one primary regulatory body while repurposing the other agencies for non-regulatory functions.

At the CFPB, discussions have included reducing regulatory and supervisory roles in favor of consumer education initiatives. Significant job cuts are anticipated across agencies under these proposals. Additionally, Trump is expected to reinstate Schedule F, an executive order aimed at making federal employees easier to dismiss, along with stricter return-to-office mandates that could prompt further staff attrition.

The final direction of these sweeping changes remains uncertain and will likely face considerable scrutiny in Congress and beyond.