The Trump Family Joins the Trend of Launching a New Bank

BlockBeats News, August 24th. According to Bloomberg, the Trump family is one step away from owning their own bank. Family members of U.S. President Trump and their business partners have received preliminary approval to establish a bank. This development comes at a rare window of opportunity: thanks to the Trump administration's push for regulatory relaxation, the current difficulty level for obtaining a U.S. national bank charter is at its lowest point in nearly 20 years.

Data from the Office of the Comptroller of the Currency (OCC) shows that in the first 19 months of Trump's second term, the agency has approved 22 bank charter applications, exceeding the total number approved in the previous 5 years. Many of the newly approved institutions come from the financial technology and digital asset fields. After the 2008 financial crisis, the number of bank charter applications dropped significantly, and regulatory agencies tightened their review processes, leading to rare large-scale approval waves in recent years.

In the past, bank charter application approvals often took months or even years, but under the leadership of OCC chief Jonathan Gould, the OCC's goal is to respond to each application within 120 days. However, it is uncertain how long this approval window can be sustained. The Republican Party will face a key test in the upcoming November midterm elections. If the Democratic Party gains a larger advantage in Congress, the regulatory agency responsible for reviewing bank charter applications may face more rigorous scrutiny.

So far, the vast majority of applications have been approved. This means that the U.S. financial industry is about to experience a large-scale "experiment": with a large number of non-traditional financial companies entering the banking sector, whether they can achieve profitability while maintaining safety and soundness remains to be seen. Advocates for lowering the barrier to entry for new tech banks believe this will help alleviate the ongoing consolidation trend in the traditional banking sector and address the issue of the ever-expanding size of the largest U.S. banks.

World Liberty Financial, owned by the Trump family, has also joined this new wave of bank applicants, alongside stablecoin issuer Circle, consumer bank Nu Holdings Ltd., and cryptocurrency exchange platform Coinbase Global Inc. For the Trump family, the core goal is to expand the usability of their USD1 stablecoin. World Liberty Financial, which received conditional approval earlier this month, stated that establishing a bank will enable them to hold assets to support the stablecoin, thereby reducing related costs.

Trump will become the first U.S. president to have a bank founded by his children during his term, although other U.S. presidents have also had close ties to the banking industry. The Roosevelt family-operated New York financial firm has a history of over a century, and former President Bush's father once served as a managing partner at the private bank and financial services company Brown Brothers Harriman.