Finance has been moving fast. From crypto to prediction betting to exchange-traded funds to private credit, new markets—and risks—are proliferating. And in his second term in the White House, Donald Trump is going all-in on deregulation. The US Securities and Exchange Commission (SEC) has flipped from its Biden-era scepticism of crypto to a full embrace. A new law, the Genius Act, has put digital stablecoins that act like dollars in a position to compete with banks for deposits. Regulators at the Federal Reserve are reversing an effort to beef up the capital cushions at large banks.The shift is reflected in both policy and personnel. The SEC’s staffing has fallen by 18% since 2024; the Commodity Futures Trading Commission, which regulates derivatives markets, was down 25% as of January. SEC Chairman Paul Atkins said in a speech that the two agencies will coordinate to usher in “a new golden age of regulatory coherence.” Critics of deregulation worry about what may fall through the cracks. Read on for a snapshot of what’s happening with US watchdogs. The Securities and Exchange Commission: When Atkins took the helm at Wall Street’s top regulator, he promised a new day. Hello to ideas to “make IPOs great again” by making it easier for a company to go public. Goodbye to so-called regulation by enforcement. That’s the label crypto executives and lobbyists applied to many of the SEC’s cases under previous Chair Gary Gensler against crypto companies. They said the agency was applying unclear rules too aggressively.Under Atkins, the SEC has determined that many crypto tokens aren’t securities under its purview but rather commodities to be regulated by the CFTC. More broadly, Atkins says the SEC should embrace new financial technologies. “The SEC’s head-in-the-sand posture—as well as its shoot-first-ask-questions-later approach—are days of the past,” Atkins said in a speech in July.The SEC has dropped more than a dozen crypto enforcement cases and quit several long-running lawsuits. Fines have plummeted. In March the SEC’s head of enforcement resigned just over six months into the job. Her acting replacement, Sam Waldon, said at a legal conference the agency will focus on “quality over quantity” in cases.The agency has also made it harder for small stockholders to bring proposals to public companies and has signalled that it wants to allow Main Street investors to gain access to private credit. There are still rules, though: Staffers in March hit the brakes on a new kind of exchange-traded fund, designed to deliver as much as five times the daily return of an underlying index. “The cops are still in the building,” says Lance Dial, partner at the law firm K&L Gates. The Commodity Futures Trading Commission: Few Americans have heard of the CFTC or understand what it does. With 540 employees, compared with the SEC’s 4,000, the CFTC oversees swaps, futures and certain options. Now it wants a bigger role in regulating crypto and prediction markets—another hot and volatile industry that the Trump administration has embraced. The CFTC has joined with the SEC to write crypto rules. And the CFTC’s new chairman, Michael Selig, has said the agency has “exclusive jurisdiction” over prediction markets such as Kalshi that let customers trade on sports, elections and most anything else. States have initiated several lawsuits contending that these online platforms are actually dressed-up gambling sites that need to be subject to state laws and taxation. Selig disagrees. “To those who seek to challenge our authority in this space, let me be clear: We will see you in court,” he said on X in February.Selig has a lot of work ahead of him, especially because he’s running the CFTC solo. Normally it’s a five-member, bipartisan commission, but Trump hasn’t appointed anyone to fill its four empty seats. Banking regulators: Since the start of Trump’s second term, the Federal Reserve and other banking agencies have loosened restraints on the largest US lenders. Those moves include relaxing how much capital a bank must hold as a buffer against potential losses, narrowing the scope of bank supervision, shrinking a Fed unit dedicated to bank oversight and roping crypto assets into the fold of the traditional banking system.The regulators say these steps are necessary to boost economic growth, increase competitiveness and support ¬innovation—all to the benefit of everyday Americans, who are struggling with an affordability crisis. But the embrace by top banking agencies of the White House’s deregulatory drive has left some academics, attorneys and advocates concerned. Those critics worry the changes now underway could effectively restore the more lax regulatory regime in place before the 2008 global financial crisis.“Banks have a nasty habit of blowing up the financial system when they’re not subject to appropriate guardrails,” says Jeremy Kress, a former Fed bank policy attorney who teaches business law at the University of Michigan. “We know that deregulating often leads to crises, yet this administration seems intent on doing it anyway.” The Consumer Financial Protection Bureau: After the financial crisis, Congress created the CFPB to focus on the welfare of individuals rather than the soundness of financial institutions. Republicans argued that the agency had too much power to impose burdensome rules. Shortly after Russell Vought was appointed acting director, he halted work at the bureau and promised to shutter the agency “within the next two, three months.” But judges in two separate lawsuits against his efforts have forced Vought to request funding from the Federal Reserve so that the agency can operate as Congress intended. Vought is now fighting to be able to slash half of remaining staff, from 1,174 to 556.For now, the agency is performing statutorily required functions and pushing through deregulation, which includes rolling back oversight of nonbank lenders and rewriting a Biden-era rule that would have given bank customers more control of their data. “There’s still a lot of people,” says Alan Kaplinsky, senior counsel of the consumer financial services group at the law firm Ballard Spahr. But he says the agency may be short-handed on the regulatory expertise it needs to push through its new agenda.The agency has cut back bank supervision visits by half and switched from in-¬person to virtual examinations, according to agency memos. Millions of customer complaints, which have been used to start investigations, have been closed without monetary relief. “Rolling back those tools to level the playing field is only going to result in more abuses,” says Tom Feltner, associate director of consumer policy at Americans for Financial Reform, a consumer and investor advocacy group in Washington.
