Trump's Executive Order Could Reshape Fed, SEC, And Other Financial Regulators

A sweeping executive order issued by President Donald Trump on Feb. 18 aims to bring the nation’s independent financial regulators under White House oversight, marking a shift in how the agencies have operated since their inception.

The directive would establish White House control over agencies that traditionally operated at arm’s length from previous, including the Securities and Exchange Commission, Federal Trade Commission, and Federal Communications Commission.

While preserving the Federal Reserve’s independence on interest rate decisions, the order subjects its regulatory functions to White House Office of Management and Budget oversight. The office would gain authority to set performance metrics and adjust agency funding based on alignment with presidential priorities.

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“The intent of this is to significantly scale back the independence of independent regulatory agencies,” Roger Nober, George Washington University professor and former Surface Transportation Board chair, told the Associated Press.

Agency leaders would require dedicated White House liaisons, fundamentally altering relationships that have remained largely autonomous since the Interstate Commerce Commission’s creation in 1887, the AP said.

Critics argue the changes threaten regulatory independence designed to insulate economic policy from political pressure. “This action will serve only to politicize and corrupt independent agencies,” warned Alexandra Reeve Givens, who leads the Center for Democracy & Technology.

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Policy analysts suggest the order may aim to provoke court challenges that could expand executive authority. The Federal Reserve declined to comment to the AP on the directive.

The immediate impact remains uncertain. The Fed’s top regulator, Michael Barr, steps down from the role on Feb. 28 but will remain on the central bank's board of governors. The Fed said it has suspended major rulemaking until a new vice chair for supervision is confirmed.

The order requires agencies to submit strategic plans to the White House and ties funding to presidential priorities, potentially setting up legal battles over congressionally approved budgets.

“For the Federal Government to be truly accountable to the American people, officials who wield vast executive power must be supervised and controlled by the people’s elected President,” the order states.

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