Key Takeaways:
OCC Comptroller Jonathan Gould told lawmakers Thursday that the only political pressure his agency has faced over whether to approve a national trust bank charter for World Liberty Financial — the crypto firm tied to President Donald Trump — has come from Democrats, not the White House.
"Your attempts to continue to pressure me are the only political pressure I've felt from anyone other than your Senate colleagues," Gould said during a House Financial Services Committee hearing, responding to a line of questioning from Rep. Gregory Meeks, a New York Democrat. Meeks had asked whether Gould was "working for the American people or working as a Trump fixer."
The exchange marked the most contentious moment of a four-hour hearing that brought together the nation's top bank regulators — Federal Reserve Vice Chair for Supervision Michelle Bowman, Comptroller Gould, FDIC Chair Travis Hill and NCUA Chair Kyle Hauptman — to address digital asset policy, merger reform and the administration's deregulatory agenda.
Gould said his agency is following ethics laws in its review of the World Liberty Trust Company application and rejected what he called "unsubstantiated allegation after unsubstantiated allegation." Meeks shot back: "Obviously, you do not want the American people to see transparency. Obviously you are Trump's fixer."
Stablecoin rules take center stage
Beyond the charter dispute, regulators outlined progress on implementing the GENIUS Act, the stablecoin regulatory legislation signed into law last year. Hill said the FDIC and other agencies will propose a joint rule requiring customer identification programs for stablecoin issuers "in the very near future," adding that FDIC staff are already preparing to receive and process applications.
Hauptman told the committee that stablecoins present an "opportunity" for credit unions, arguing they can make payments "faster, cheaper and more inclusive." He floated the idea of using stablecoins to issue tax refunds, saying payments could settle instantly rather than over multiple business days.
Rep. Brad Sherman, a California Democrat, called that "the worst idea" he could imagine. "It would sanctify an alternative to the U.S. dollar, an alternative designed to facilitate a tax-evasion economy," Sherman said. He also warned that the GENIUS Act's prohibition on interest-bearing stablecoins would face legal challenges, saying "the smartest, or at least the best-paid lawyers in the country" are seeking ways around it.
Regulatory overhaul and AI risks
Hill used his testimony to highlight the FDIC's push toward risk-based supervision, saying the agency is working to finalize a rule defining unsafe or unsound practices so that examiners focus on "material financial risks rather than on process-oriented, check-the-box requirements." The FDIC has also lifted a ban on private equity bidding for failed banks and proposed a "shelf charter" to let nonbanks quickly acquire charters to bid on failed institutions.
Bowman said the Fed is tracking the migration of traditional banking activity into the nonbank sector, noting that nondepository financial institutions have captured a growing share of the lending market. She said the Fed has initiated a supervisory data collection series to improve transparency into private credit flows.
Rep. Bill Foster, an Illinois Democrat, warned that autonomous AI systems could trigger bank runs in "40 minutes or 40 seconds" rather than the 40 hours it took during the Silicon Valley Bank failure in 2023. He pressed regulators to define a standardized software stack for the financial system to ensure consistent cyber defenses across institutions of all sizes.
Gould said the OCC is focused on third-party vendors that support smaller banks, which he said are most vulnerable to cybersecurity gaps. "It's very important for us to focus on the service providers that support them," he said.
This article is for informational purposes only and does not constitute investment advice.
