FDIC Elimination: Trump, DOGE Target Watchdogs Behind Operation Choke Point 2.0

Highlights,Donald Trump’s transition team is reportedly planning a major overhaul in the country’s banking sector by reducing, consolidating, and even eliminating key banking regulators in Washington. Advisors from the newly formed Department of Government Efficiency (DOGE), headed by Elon Musk, are mulling the possibility of abolishing the Federal Deposit Insurance Corporation (FDIC).,Advisors from DOGE conducted interviews for roles in the FDIC and the Office of the Comptroller of the Currency (OCC). Besides, they also floated the idea of transferring the responsibilities of deposit insurance to the Treasury Department. However, such an overhaul would need Congressional approval and would be the first time in history that the US government is likely to abolish a legacy agency.,On the other hand, bank executives are optimistic that President-elect Trump will roll back stringent regulations on capital requirements and consumer protections. However, some market analysts also believe that FDIC-backed deposit insurance is untouchable and “too big to fail”. While addressing the New York Stock Exchange on Thursday, December 12, Donald Trump also said that he has big plans for the crypto market. In a brief interview with Jim Cramer, Trump said:,The discussions reflect Donald Trump’s aggressive approach to cutting government size and easing oversight of the heavily regulated financial sector. As a result, his transition team comprising Elon Musk, Scott Bessent, and Vivek Ramaswamy, is reportedly considering merging the FDIC, OCC, Federal Reserve nonmonetary functions, and the National Credit Union Administration (NCUA).,On the other hand, crypto leaders like Brain Armstrong, CEO of Coinbase, have voiced their opinion on the removal of anti-crypto regulators like Caroline Crenshaw from the Senate Banking Committee.,Crypto industry leaders have been calling to eliminate regulators behind Operation Choke Point 2.0. Tyler Winklevoss, the co-founder of the crypto exchange Gemini stated:,On Thursday, pro-crypto Rep. French Hill was chosen to head the House Financial Services Committee, with a focus on stablecoins and cryptocurrency regulations. Former FDIC Chair Sheila Bair expressed skepticism about eliminating a bank regulator, noting that banks value maintaining relationships with specific agencies. Speaking to WSJ, she said:,In a separate proposal, some transition team members have suggested maintaining only one primary banking regulator, with the others retaining non-regulatory functions. While the proposals signal Donald Trump’s willingness to shake up federal oversight, experts believe these radical changes face significant political and industry resistance.,