A new presidential administration always spells change. This year, advocates of postal banking are on the lookout for changes to federal regulation that would make it easier for big banks and payday lenders to rip off consumers across the country.
Much of what has us concerned are proposals in Project 2025 that would affect our rights as they relate to financial institutions.
Consolidating Regulators
The authors of Project 2025 suggest that various financial regulatory bodies could be consolidated into a single office at the Department of Treasury. The Federal Deposit Insurance Corporation (FDIC), which insures individuals’ deposits and conducts important analysis of banks’ overall financial health, is one agency that is slated to be rolled into Treasury. The Heritage Foundation, the organization primarily responsible for Project 2025, has previously argued that deposit insurance should be reduced to $40,000, from the current limit of $250,000, before being phased out entirely.
Project 2025 also calls for the Financial Crimes Enforcement Network (FinCEN) to be severely curtailed. FinCEN is responsible for investigating and prosecuting financial crimes, such as money-laundering and the financing of terrorism.
Killing the Consumer Financial Protection Bureau
Another key commitment of Project 2025 is one we’ve reported on before; the conservative movement’s long-standing desire to eliminate the Consumer Financial Protection Bureau (CFPB). The CFPB emerged out of the 2008 financial crisis and has been the federal government’s key regulator in protecting consumers from the abuses of the financial industry. The CFPB regulates mortgages, student loans, credit cards, payday lenders, and other financial instruments that are central to household finances.
Since its creation, the big banks and lenders on Wall Street have bristled against increased regulation and oversight brought on by the CFPB. In 2024, opponents of the CFPB brought a lawsuit to the Supreme Court, hoping to overturn the funding mechanism for the Bureau. While their lawsuit failed, the new Trump Administration could present their best chance yet to kill the CFPB.
Currently, the architects of Project 2025 are proposing deep cuts to the CFPB and hope to overturn many of the regulations that emerged after the 2008 financial crisis caused by the banking industry. Doing so would make everyone more vulnerable to predatory practices of banks, credit card companies, and other lenders.
There are a number of lawsuits the CFPB brought against some of the country’s biggest financial institutions in 2024, such as Capital One, Walmart, JP Morgan, Bank of America, among others, that are now in doubt, as the new Administration plans to overhaul the Bureau’s leadership. Those cases centered around protecting consumers from fraudulent activity on Zelle, the peer-to-peer payment platform, and in the case of Walmart, charging junk fees to delivery drivers, that could potentially be thrown out by a new director or after other rule changes.
Project 2025 also has proposals that would affect the way the Federal Reserve functions. While some of these would reduce compliance issues for banks – seemingly a gift to Wall Street – others would make it more difficult and expensive for banks to access funding. In turn, consumer borrowing could be more expensive, despite commitments from the authors to use the tools of government to drive down prices.
The road ahead for postal banking is still a long one. In this moment, we must stay united in our fight to defend our rights to be protected from financial abuse and keep building the movement to bring public options, like postal banking, to the world of finance.
