President-elect Donald Trump is facing criticism for his transition team’s consideration of reforming or eliminating the Federal Deposit Insurance Corporation (FDIC), a key regulator that protects bank customers’ deposits. The agency, created during the Great Depression era to restore faith in American banking, has been the subject of intense scrutiny due to potential changes.
Sources familiar with the discussions indicate that individuals being considered for roles within the FDIC or Office of the Comptroller of the Currency are being asked if they believe the agency can be reformed or eliminated. However, any significant changes would require legislative approval from Congress.
The motivation behind these questions remains unclear, but some speculate that it may be related to Elon Musk’s support for cryptocurrency, which has been warned by the FDIC about its potential risks for banks. Any reforms could have a detrimental impact on customer confidence in the banking system, with the FDIC insuring deposits up to $250,000.
The FDIC is a self-sustaining entity, generating funds from insurance premiums paid by banks. Its creation was a response to the widespread bank failures during the Great Depression, which led to the imposition of a national “bank holiday” and subsequent regulatory reforms.
Experts and commentators are expressing concern over the potential implications of eliminating or reforming the FDIC. Former Labor Secretary Robert Reich stated that Trump’s goals would prioritize enriching Wall Street at the expense of other communities, while journalist Walker Bragman warned that such actions could lead to another economic depression.
Former FDIC Chair Sheila Bair emphasized that deposit insurance is funded by bank premiums, not taxpayers, and that the Treasury Department lacks expertise in handling bank failures. The FDIC’s existence has been a cornerstone of American banking stability for decades, and any significant changes would require careful consideration to maintain customer trust and confidence.
Source: https://truthout.org/articles/trumps-doge-team-is-asking-potential-appointees-if-they-can-abolish-the-fdic