Trump Family Joins the Trend of Starting New Banks

On August 24, the Trump family is just one step away from owning their own bank. Family members of 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 deregulation, the difficulty of applying for a national bank charter in the U.S. has dropped to its lowest level 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, surpassing the total number approved in the previous five years. Among these newly approved institutions, many come from the fintech and digital asset sectors. After the 2008 financial crisis, the number of bank charter applications significantly declined, and regulators tightened their scrutiny, making such a large wave of approvals rare in recent years.

In the past, the approval process for bank charter applications often took months or even years, but under the leadership of OCC head Jonathan Gould, the OCC aims to respond to each application within 120 days. However, it is uncertain how long this approval window will last. The Republican Party will face a crucial test in the midterm elections this November. If the Democrats gain a larger advantage in Congress, the regulatory agency responsible for reviewing bank charter applications may face stricter scrutiny.

So far, the vast majority of applications have been approved. This means that the U.S. financial industry will witness a large-scale "experiment" for the first time: whether a significant number of non-traditional financial companies entering the banking sector can achieve profitability while maintaining safety and soundness. Proponents of lowering the entry barriers for new tech banks believe this will help alleviate the ongoing trend of consolidation in traditional banking while addressing the issue of the growing size of the largest U.S. banks.

World Liberty Financial, a company owned by the Trump family, has also joined this round of new 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 use of their USD-pegged stablecoin USD1. Earlier this month, World Liberty Financial stated that establishing a bank would allow it to hold assets to support the stablecoin, thereby reducing related costs.

Trump will become the first sitting U.S. president to have a bank founded by his children during his term, although other U.S. presidents have also maintained close ties to the banking industry. The Roosevelt family has operated a financial firm in New York for over a century; former President George H.W. Bush's father was a managing partner at the private banking and financial services company Brown Brothers Harriman.