How Trump’s Grip on Regulators Could Change Their Fate

If you thought Washington’s regulatory watchdogs were staying independent, think again. President Donald Trump just signed an executive order that pulls federal agencies closer under White House control, shaking up oversight for banks, financial markets, and corporate compliance. From the Securities and Exchange Commission (SEC) to the Federal Trade Commission (FTC) and Federal Communications Commission (FCC), some of the most powerful regulators will now have to submit draft regulations for White House review and align their priorities with Trump’s administration. But that’s just the start. Trump’s move goes beyond standard regulatory oversight—it’s a full-blown effort to shrink government, cut costs, and consolidate power. What does this mean for banks, businesses, and financial professionals? Let’s break it down.

Regulators on a Shorter Leash

For decades, independent agencies like the SEC, FTC, and FCC have had the authority to enforce rules without direct presidential supervision. While they often coordinated with the White House, they weren’t obligated to follow its directives. That’s changing. Trump’s new order demands that these agencies:

• Submit all draft regulations for White House approval before publication.
• Consult with the administration on their priorities and strategies.
• Follow newly set “performance standards” that align with Trump’s goals.

The Federal Reserve’s monetary policy remains independent, meaning the Fed can still set interest rates without White House interference. However, its supervision and regulation of financial institutions is now under Trump’s direct oversight, a move that could shift how banks are regulated. “This seems directed toward preventing a negative market reaction,” said Jeff Naimon, partner at Orrick, referring to the carve-out on monetary policy.

DOGE and the Government Cost-Cutting Agenda

Trump’s executive order isn’t just about controlling regulations—it’s about cutting the federal government down to size. That’s where Elon Musk’s Department of Government Efficiency (DOGE) comes in. DOGE, a cost-cutting initiative led by Musk, has been working behind the scenes to slash government spending and eliminate federal agencies. Under this directive, Trump has already:

• Eliminated multiple advisory councils, including those overseeing community banking and credit unions.
• Ordered agency workforce reductions, with 75,000 federal employees taking voluntary buyouts—though this falls short of the original 5-10% goal.
• Called for additional agency closures, with a list expected within 30 days.

Musk’s deep involvement in government restructuring has raised concerns over conflicts of interest, especially since DOGE teams now have access to sensitive federal data. A federal judge recently denied a request to block DOGE teams from accessing government systems, a legal win for Musk and Trump’s initiative.

The Push to Roll Back

While the executive order applies broadly to federal agencies, some of the most immediate changes are happening in financial regulation.

SEC Rolls Back Rules

• Shortly after Trump took office, the SEC rescinded a crypto-related Staff Accounting Bulletin, criticized by the industry.
• The SEC withdrew PCAOB standards on firm metrics and reporting after pressure from the AICPA and major audit firms.
• Acting SEC Chair Mark Uyeda announced the agency would no longer litigate its climate-related disclosure rule, which was already paused due to industry lawsuits.

PCAOB (Audit Regulator) Shake-Up

• Paul Atkins, a former SEC commissioner critical of the PCAOB, is nominated to replace Gary Gensler as SEC Chair.
• The PCAOB could be absorbed into the SEC, reducing redundancy but raising concerns about oversight loss.
• The Heritage Foundation’s Project 2025 called for eliminating the PCAOB and FINRA, shifting their functions under the SEC.
• PCAOB inspections and enforcement actions may be dialed back, focusing more on major audit failures rather than compliance issues.
• Budget cuts could force the PCAOB to shrink and return to its core mission of overseeing audits, instead of expanding regulatory reach.

We could see fewer monetary penalties and a return to traditional audit oversight," says Steven Richards, former PCAOB advisor.

Wall Street Just Got a Lighter Load

By tightening control over financial regulators, Trump is expected to usher in an era of lighter-touch oversight, reducing compliance costs for businesses. That means:

• Fewer enforcement actions from the SEC and FTC.
• A rollback of financial regulations that some argue slow down business growth.
• A more industry-friendly approach to policies affecting banking, mergers, and acquisitions.

However, some experts warn that the long-term impact could be less predictable. Banks might enjoy reduced regulation in the short term,” says Kathryn Judge, professor of law at Columbia University, “but these constant policy shifts create uncertainty, making it harder for financial institutions to plan for the future.

Will This Move Survive Legal Challenges?

Not everyone is on board with Trump’s regulatory overhaul. Skeptics argue that this order is legally questionable, violating the laws that grant regulators independence from the White House. “This is one of the most aggressive moves to assert presidential power over the administrative state in U.S. history,” says Peter Conti-Brown, a financial regulation professor at Wharton.

The Supreme Court’s recent rulings (Jarkesy and Loper Bright cases) have already weakened agency power, making it easier for Trump to push these changes. However, legal battles are expected, and some aspects of this order may be tied up in court for years. Even if the executive order holds up in court, its impact could be short-lived. If another administration takes over, it could undo Trump’s policies, creating a regulatory whiplash effect that leaves businesses struggling to adapt.

What’s Next?

For now, banks and businesses can expect lighter regulation, but it comes with a catch—regulators like the SEC and FTC now answer to the White House. While this may mean fewer compliance headaches, legal battles are almost certain, as critics argue the order oversteps Congress’s authority. Meanwhile, the PCAOB and SEC shake-up could change how audits and financial reporting are handled, with a likely shift away from strict enforcement and toward core audit oversight. But with court challenges looming and political shifts always in play, nothing is set in stone. Bottom line? Regulatory uncertainty is the new normal. Finance professionals should stay sharp, keep an eye on legal battles, and be ready to adapt as Washington rewrites the rules. Stay ahead of the curve! Subscribe now for the latest tax trends, financial insights, and regulatory updates—delivered straight to your inbox!