Senator Warren Calls for Suspension of Bank Charter Evaluation
U.S. Senator Elizabeth Warren has initiated a call for banking regulators to suspend their evaluation of a national bank charter application related to World Liberty Financial (WLFI), citing unresolved ethical issues involving former President Donald Trump.
Concerns Raised in Letter to OCC
On January 13, Senator Warren addressed her concerns in a letter to Jonathan Gould, the Comptroller of the Office of the Comptroller of the Currency (OCC). The request was specifically aimed at pausing the deliberation on the application filed by WLTC Holdings LLC, an organization that has connections to WLFI, co-founded by Trump himself and backed by his family.
Warren expressed apprehension that granting this charter could place the OCC in a unique position where it would be expected to regulate a business whose finances are intertwined with the current president. According to her, doing so could lead to an unprecedented scenario in which the OCC is tasked with overseeing a company directly affiliated with the president’s financial interests. This, she warned, could significantly damage public faith in the regulator and the banking system as a whole.
Implications of the Charter Application
The charter application would allow WLFI’s trust bank to function under federal guidelines, opening the possibility for it to manage activities related to its USD1 stablecoin. Warren emphasized that granting approval could afford WLFI key regulatory benefits, particularly at a time when Congress has yet to fully address critical elements related to the structure of the crypto market.
Warren connected her request with ongoing legislative discussions, mentioning that current proposals related to crypto market structure fail to navigate the complexities arising from presidential ties to digital currency firms. Notably, she referenced the recently passed GENIUS Act, which she argued did not adequately tackle these issues.
Request for Assurance from the OCC
In her communication, Senator Warren insisted that the OCC should delay any further work on the WLFI application until Trump completely severs what she identified as a conflict of interest with the firm. She sought a written assurance from the Comptroller by January 20, stipulating that no actions would take place regarding the application prior to that commitment.
Potential Impact on Trust in Federal Banking
While the OCC has not yet made a public statement responding to Warren’s letter, it has granted conditional approvals for other crypto-associated banking firms in the recent past. Nevertheless, Warren cautioned that moving forward with WLFI’s application at this time could further diminish trust in the federal banking regulatory framework. As the conversation about cryptocurrency regulation continues among lawmakers, this matter is likely to resurface amid upcoming committee discussions.
