WASHINGTON — President Donald Trump signed an executive order that would fundamentally reshape the executive branch, bringing independent agencies more firmly under the control of the White House in a move that could have sweeping consequences for bank regulation.
The order represents the Trump administration's latest attempt to centralize power within the White House under so-called unitary executive theory — long considered a fringe idea — which posits that the president has total authority over the executive branch. It also shows the rising power and influence of Russell Vought, a key architect of Project 2025, Trump's budget chief and
Under the order, the White House Office of Management and Budget, which Vought runs, will review major orders submitted to the White House by independent agencies. OMB would also write "performance standards and management objectives" to the heads of independent agencies, review and adjust their budgets, and those agencies would have to hire a White House liaison.
The changes made by OMB to agencies' budgets "may prohibit independent regulatory agencies from expending appropriations on particular activities, functions, projects, or objects," the order said. And no agency worker, including an agency's attorneys, "in their official capacity may advance an interpretation of the law as the position of the United States that contravenes the President or the Attorney General's opinion on a matter of law."
"For the Federal Government to be truly accountable to the American people, officials who wield vast executive power must be supervised and controlled by the people's elected President," the White House said in the order.
The Federal Reserve would retain independence only in monetary policy. The order applies to the Fed "in connection with its conduct and authorities directly related to its supervision and regulation of financial institutions. "
The dynamic with the Fed outlined in the executive order echoes what Treasury Secretary Scott Bessent
"I think on monetary policy decisions, the FOMC should be independent," Bessent said.
The order is likely to face significant legal challenges.
"Trump's illegal executive order on independent agencies aims to shield corporations from accountability and centralize more power with Trump and his minions," said Robert Weissman, co-president of Public Citizen, in a statement.
While the order itself doesn't specify specific agencies other than the Fed, most bank regulatory agencies such as the Federal Deposit Insurance Corp., the Fed and the CFPB are considered independent, and the executive order would likely impact them.
"Should this executive order survive legal scrutiny by the courts, it would change the rulemaking and interpretive legal process dramatically," said Carrie Hunt, chief advocacy officer at America's Credit Unions, in a statement. "While we are already living in a post-Chevron world where agencies are given little deference to how they interpret statutes, this would be a totally new era linking agency action to the sitting president."
A fact-sheet accompanying the executive order specifically calls out the Securities and Exchange Commission, the Federal Trade Commission and the Federal Communications Commission.
The Trump administration's move could concern bankers, who historically have said that they want the bank regulatory process to be nonpolitical. IntraFi in a recent survey found that
In an American Banker survey last year,
The orders follow a series of actions from the Trump administration to dismantle certain agencies, including the CFPB, and generally to undercut the civil service. Not only has Trump pursued mass firings of government workers, but also he has
