The US government is reportedly planning to consolidate bank supervision under the Office of the Comptroller of the Currency (OCC), which could lead to significant changes in the way banks are regulated.
According to email templates created by the OCC, employees from the Federal Deposit Insurance Corp. (FDIC) and the Consumer Financial Protection Bureau (CFPB) may be transferred to the OCC as part of a broader reshaping of bank supervision.
The OCC has created email distribution lists for potential transferees, indicating that the move is being made without congressional approval. This has raised concerns among experts, who say it could be seen as a “pretext” for consolidating the agencies without a change in law.
Critics argue that hollowning out the workforces of these agencies would allow for the consolidation to be justified as necessary to reduce duplication and improve efficiency. However, many see this as a thinly veiled attempt to undermine the existing regulatory framework.
The FDIC and CFPB have already seen significant workforce reductions under the Trump administration, with around 170 probationary employees laid off by the FDIC and up to 95% of the CFPB’s staff planned for termination.
Experts warn that such rapid changes could have unintended consequences, including the risk of regulatory capture and erosion of consumer protections. The proposed consolidation also raises concerns about the future of the Deposit Insurance Fund, which would be transferred from the FDIC to the OCC.
As one expert noted, “The banking regulatory system is byzantine and a historical accident,” highlighting the need for careful consideration and reform rather than hasty changes.
Source: https://news.bloomberglaw.com/banking-law/trump-gets-ready-to-move-bank-regulators-after-workforce-purge