Trumps laugh all the way to the bank charter

By Stephen GandelEven the Trump administration's smart steps toward financial deregulation veer into worrisome territory. The Office of the Comptroller of the Currency granted its latest trust bank charter to a fledgling financial technology firm, part of a sensible initiative to give newcomers more of a fighting chance against incumbents. Just days after rejecting applications from several overseas startups, Friday's recipient was World Liberty Financial, a cryptocurrency venture backed by the U.S. first family.The provisional approval enables World Liberty to issue its own stablecoins, hold customer assets and settle payments. Such licensing for banking wannabes has been rare since the financial crisis. Done properly, however, it can add competition, foster new services and boost regulatory oversight. Empowering a company 38%-owned by an entity affiliated with President Donald Trump and his relatives undermines such benefits.World Liberty has many troubling aspects. It funneled more than $1.5 billion to the Trumps, largely from sales of crypto tokens that have saddled many retail investors with losses, according to a published in June. A subsequent report last week said it was doing business with Chinese artificial intelligence companies the White House flagged for security concerns.In addition to broader conflicts of interest involved with the government protecting customers of a bank partly owned by the U.S. president, World Liberty appears to have some of the same features that prompted the OCC to deny other outfits seeking charters. Earlier this month, for example, the agency snubbed Dutch fintech Bunq, citing its lack of U.S. banking experience.Only World Liberty's chief legal officer has notable industry experience, at Robinhood Markets and Charles Schwab. None of the named executives or directors led a regulated lender. Zach Witkoff, the company's chief development officer and son of Trump's Middle East envoy Steve Witkoff, spent less than two years at Wells Fargo as a junior member of its commercial-property lending team.The OCC also turned away UK-based Wise in part because of shortcomings in its anti-money-laundering controls. World Liberty itself received $100 million from a British businessman under investigation for money laundering, the New York Times reported earlier this month. Wise, Bunq and others are allowed to reapply. The Trump administration has denied any conflicts with World Liberty.More competition in U.S. banking is long overdue. Before 2008, authorities regularly approved dozens of new regulated financial institutions; from 2009 to 2024, they authorized fewer than 50. Over that span, JPMorgan and its peers got bigger, often while paying depositors next to nothing for their savings. Trump's banking shakeup, however, is creating at least as many liabilities as assets.Follow Stephen Gandel on LinkedIn and X.CONTEXT NEWSThe Office of the Comptroller of the Currency on August 14 granted preliminary approval for a national trust bank tied to World Liberty Financial, a cryptocurrency venture partly owned by U.S. President Donald Trump's family.