Three financial regulators are scrambling following the President Donald Trump administration’s latest round of personnel cuts.
Over 2,300 staffers across the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Securities and Exchange Commission are set to be laid off, Bloomberg reported Wednesday (May 7). The group includes bank examiners, criminal investigators and economists.
The layoffs are the sharpest in decades, and the financial regulators affected are responsible for overseeing banks, trading houses and the public markets, according to the report. However, the regulators are shuffling their remaining staffers and adjusting policies to manage the cuts.
“The OCC has said it will combine supervision teams that were previously tailored to banks by size, and the SEC has reorganized its regional offices,” the report said. “The FDIC has yet to announce significant changes, but officials are rethinking its approach to bank supervision, according to people familiar with internal discussions.”
Even before his inauguration, Trump and his team signaled his intent to pare back financial regulatory bodies. Members of his transition team suggested that they wanted to shrink, consolidate or eliminate the agencies.
The ideas included abolishing the FDIC and shifting deposit insurance into the Treasury Department; eliminating the Consumer Financial Protection Bureau or limiting its responsibilities to consumer education; and either combining the FDIC, the OCC and the Federal Reserve or having only one of them continue to regulate banks, PYMNTS wrote in December.
In March, the Treasury Department said it would conduct a “substantial” round of layoffs. The number of jobs affected was not disclosed.
In April, Acting CPFB Director Russell Vought said the agency was letting go of 90% of its employees, or 1,500 staffers, cutting the agency’s workforce to 200 people. Vought said in a notice to affected employees that the cuts were “necessary to restructure the bureau’s operations to better reflect the agency’s priorities and mission.”
One day later, on April 18, Judge Amy Berman Jackson blocked that move while she considered if the layoffs violated her previous order, which said the CFPB could not conduct a reduction-in-force until it conducted a “particularized assessment” showing that employees who are laid off are not necessary for the agency to fulfill its statutory duties.
The decision is still working its way through the courts.
