If former Republican President Donald Trump wins the US election on November 5, he is expected to quickly overhaul the country’s financial regulators, which under Democrat Joe Biden’s presidency have implemented a series of tough new rules for banks, private funds and other lenders. Here’s how Mr. Trump could take control of the agencies when he takes office on January 20, 2025.
GARY GENSLER, CHAIRMAN OF THE SECURITIES AND EXCHANGE COMMISSION
Mr. Trump said he would fire Gary Gensler, chairman of the SEC, on day one. Although most jurists agree that the president does not have the power to simply dismiss the president of the SEC, he can, however, replace him with another commissioner who will act in the interim until the Senate confirms the appointment of a permanent replacement.
In Mr. Trump’s case, it would most likely be one of the two Republican commissioners, Hester Peirce or Mark Uyeda. Mr. Gensler could remain commissioner until his term ends in 2026, but that would be highly unusual.
COMMODITY FUTURES TRADING COMMISSION CHAIR ROSTIN BEHNAM
Likewise, the law does not explicitly say whether the president has the authority to remove the CFTC chairman, according to the Government Accountability Office. But Mr. Trump would have the power to replace CFTC Chairman Rostin Behnam with another CFTC commissioner, who would likely be either Republican Commissioner Summer Mersinger or Caroline Pham.
CONSUMER FINANCIAL PROTECTION OFFICE
In 2020, the U.S. Supreme Court gave the president more authority over the Consumer Financial Protection Bureau, including allowing him to fire its director at will.
Mr. Trump is expected to fire director Rohit Chopra on day one, but the question of who can serve as acting director has always been controversial. In 2017, the Trump administration claimed that it had the authority under the Federal Vacancy Act of 1998 to appoint an acting director of the CFPB, while the agency’s deputy director At the time, Leandra English, argued that under the 2010 Dodd-Frank law that created the agency, she was its rightful acting director.
This extraordinary dispute went to court, and a federal judge in Washington sided with the Trump administration. The appeals court has not ruled on the case.
CFPB experts believe that Mr. Trump could successfully invoke the appeals court decision and that of the United States Supreme Court in 2020 to assert his right to appoint the acting director.
ACTING CONTROLLER OF THE CURRENCY MICHAEL HSU
Mr. Trump would have the authority to immediately replace Acting Comptroller of the Currency Michael Hsu, the nation’s banking regulator, with another acting comptroller. That person could run the agency, potentially for years, until the Senate confirms a monitor.
FEDERAL DEPOSIT INSURANCE CORPORATION
The FDIC situation is more complex. Following a sexual harassment scandal at the agency, Democratic FDIC Chairman Martin Gruenberg said he would resign once Congress confirmed his replacement. But with the Senate dragging its feet on confirming Democrat Christy Goldsmith Romero’s nomination, it’s unclear if that’s the case.
The question of whether the president can only remove the FDIC chairman for cause remains open, legal experts say, although some Republican lawmakers have argued that Mr. Biden could have fired Mr. Gruenberg based on the leadership failings identified by an independent investigation into the scandal. According to that investigation, numerous FDIC employees said that Mr. Gruenberg had a tendency to lose his temper and had an “aggressive” management style.
Mr. Gruenberg said he did not recall acting inappropriately and pledged to implement the report’s recommendations to improve the FDIC’s culture.
Whoever is president in January, by replacing Mr. Chopra and Mr. Hsu, the two other Democrats on the five-member FDIC board, Mr. Trump could hand control of the agency to Republicans . The council’s Republican majority could block regulations proposed by the president and force votes on other issues the president might oppose.
Democrats made a similar maneuver in 2021, when they bypassed then-Trump appointee Jelena McWilliams and voted to revise the bank merger policy despite her protests.
VICE PRESIDENT OF THE FEDERAL RESERVE FOR SUPERVISION MICHAEL BARR
The president can only remove Fed governors for cause, meaning Barr could remain in his post as the central bank’s chief regulator until his term expires in July 2026.
But by replacing Hsu and packing the FDIC board, Mr. Trump could take control of much of the banking regulatory agenda and block any Fed plans for the central bank to work on with both other agencies. This could include Basel Endgame’s controversial capital increases, plans to require regional banks to issue more long-term debt and new requirements ensuring banks have enough liquidity in times of crisis.
