Members of U.S. President Donald Trump’s family and their business partners have received preliminary approval to establish a bank, according to Bloomberg, bringing the family close to owning a banking institution of its own.
The development comes at a rare moment for bank charter applicants. Bloomberg said the Trump administration’s push for lighter regulation has made it easier to apply for a U.S. national bank charter than at any point in nearly 20 years.
OCC approvals have accelerated
Data from the Office of the Comptroller of the Currency, or OCC, show that the agency approved 22 bank charter applications in the first 19 months of Trump’s second term. That total is higher than the number approved over the previous five years combined.
Many of the newly approved institutions come from the fintech and digital asset sectors. After the 2008 financial crisis, charter applications fell sharply and regulators tightened their review process, making this kind of broad approval wave unusual in recent years.
In the past, bank charter reviews often took months and in some cases years. Under OCC head Jonathan Gould, the agency’s target is to respond to every application within 120 days.
The current window may not stay open
How long this approval window remains in place is still unclear. Republicans face a key test in this year’s November midterm elections. If Democrats gain a stronger position in Congress, the regulators reviewing bank charter applications could come under heavier scrutiny.
So far, most applications have been approved. Bloomberg said that could turn into a large-scale test for the U.S. financial industry: whether a larger group of nontraditional financial companies can enter banking, make money, and remain safe and sound at the same time.
Supporters of lower entry barriers for technology-focused banks argue that the shift could ease the long-running consolidation of traditional banking and address the growing size of the country’s biggest banks.
World Liberty Financial joins the applicant pool
Trump family-backed World Liberty Financial is among the new bank applicants. Others named in the report include stablecoin issuer Circle, consumer bank Nu Holdings Ltd., and cryptocurrency exchange platform Coinbase Global Inc.
For the Trump family, the central objective is to broaden the use of its dollar stablecoin, USD1. World Liberty Financial said earlier this month, after receiving conditional approval, that establishing a bank would allow it to hold assets backing the stablecoin and lower related costs.
A first for a sitting U.S. president
Bloomberg said Trump would become the first sitting U.S. president whose children founded a bank during his time in office. The report also noted that other U.S. presidents have had close ties to banking. The Roosevelt family’s New York financial firm has operated for more than a century, and former President George H.W. Bush’s father was a managing partner at private bank and financial services firm Brown Brothers Harriman.