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The U.S. Treasury Department is reportedly drafting new recommendations aimed at strengthening its control over key banking regulators, specifically the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC).
According to sources cited by Semafor, Treasury initiated this effort after determining that merging these agencies would require congressional approval, making consolidation unlikely in the near term. Instead, the proposed changes focus on streamlining regulatory oversight and enhancing Treasury’s influence over multiagency financial policies.
The Treasury Department has not yet publicly commented on these reported recommendations. However, officials are expected to finalize their proposals in the coming weeks.
A Move to Reshape Bank Supervision
If implemented, the recommendations could also curb the independence of the Federal Reserve in bank supervision. The plan would position Treasury as the lead agency for implementing multiagency financial regulations affecting the nation’s largest banks.
The debate over regulatory consolidation gained traction earlier this month when Treasury Secretary Scott Bessent addressed media speculation about a potential merger of federal banking agencies. Speaking at The Economic Club of New York, Bessent clarified:
“We need our financial regulators singing in unison from the same song sheet. To be clear, this does not mean consolidation of agencies, but coordination via Treasury, such that our regulators work in parallel with each other and industry.”
Bessent also echoed concerns from banking industry leaders, calling federal bank supervision opaque, subjective, and overly restrictive. He stated that Treasury will use the Financial Stability Oversight Council (FSOC) and other interagency bodies to coordinate regulatory efforts. Additionally, a recent executive order from President Donald Trump grants the administration increased authority over rulemaking by independent regulatory agencies.
Reshaping the FDIC and Encouraging Innovation
The FDIC is already undergoing significant structural changes under Acting Chairman Travis Hill, who assumed leadership in January. Hill has outlined an ambitious regulatory agenda, promising to:
- Conduct a full-scale review of existing regulations, guidance, and manuals
- Adopt a more open-minded approach to financial technology (FinTech) partnerships and digital assets
- Enhance engagement with community banks to address growing technology costs
With Treasury looking to expand its role in banking oversight, these developments signal a broader push to modernize financial regulations, streamline interagency coordination, and shape the future of the U.S. financial regulatory framework.
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