OCC Denies Plans to Consolidate Federal Banking Regulators

A federal banking regulator is denying it has any plans to receive transferred employees from other agencies that have been targeted by workforce cuts in recent weeks.

Email lists at the Office of the Comptroller of the Currency for transferees from the Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau raised alarm among employees concerned about agency consolidation, but the OCC said at least some lists were created years earlier.

The OCC had set up email lists for potential transferees from the FDIC and the CFPB, according to Outlook templates obtained by Bloomberg Law from multiple sources at different agencies, granted anonymity to prevent retaliation, who said the lists were new.

The OCC said in a Wednesday statement, hours after Bloomberg Law’s story published and after multiple requests for comment, that some of the email addresses were “legacy accounts created in 2011.”

“The OCC has discontinued the use of these email groups and is not preparing for the transfer of employees from the FDIC, CFPB or other agency to the OCC,” an agency spokesperson said.

But the email lists were discovered and flagged by workers who have raised concerns about Trump administration plans to merge employees who survive planned workplace reductions at the FDIC and CFPB into the OCC. Those plans were first reported by The Wall Street Journal. Reached again Wednesday, the sources said the lists appeared to be new.

Project 2025

Project 2025, the Heritage Foundation-produced policy blueprint that has underpinned many of the second Trump administration’s actions to date, calls for legislation to merge the OCC, the FDIC, the National Credit Union Administration, and the Federal Reserve’s bank regulatory and supervision functions into one agency.

It also calls for legislation to eliminate the CFPB.

The Trump administration so far has chosen to pursue changes to the bank regulatory structure through administrative actions.

Russell Vought, the director of the Office of Management and Budget and architect of Project 2025, has all but shut down the CFPB. Even the agency’s signage has been removed from its Washington headquarters.

Vought, the acting CFPB director, has terminated as many as 170 CFPB employees serving on a probationary period or on fixed terms.

A lawsuit from the National Treasury Employees Union claims Vought plans to fire up to 95% of the agency’s staff. Those plans are on hold as the litigation moves forward.

The FDIC for its part lost around 10% of its workforce in the past week. Around 500 employees took up the Trump administration’s deferred resignation “buyout” offer, and the FDIC fired around 170 probationary employee.

Agency Control

President Donald Trump signed an executive order Feb. 18 giving him more direct control over independent federal regulators, a move that could help streamline the process of consolidating them.

Either way, the potential for consolidating agencies could bring more confusion to the bank regulatory process. Each agency was created by Congress, with their supervisory requirements set in statute.

The FDIC has responsibility for most community banks, the OCC for national banks, and the Fed for a smaller number of community banks and bank holding companies. The CFPB is responsible for monitoring banks and nonbanks alike for consumer compliance issues.

Combining those functions without redoing the federal laws is likely to bring more uncertainty and opacity to the banking system, and that can lead to destabilizing bank runs, said Graham Steele, the former assistant Treasury secretary for financial institutions in the Biden administration.

“It’s a bit of an own-goal,” he said. “Instead of improving the processes, you’re making it that much harder.”

Eliminating the agencies is also unlikely to bring cost savings to the federal government since none are funded through congressional appropriations.

The FDIC is largely funded by assessments on banks, which also pay premiums into the Deposit Insurance Fund used to backstop all bank deposits up to $250,000. The OCC is funded largely through assessments as well.

The CFPB is funded directly through the Federal Reserve.