Introduction of New Legislation

On Saturday, Senator Elizabeth Warren and other Democratic lawmakers introduced a bill aimed at preventing presidents and top government officials from owning or controlling banks. This comes after federal regulators gave preliminary approval to a bank charter application connected to World Liberty Financial, a cryptocurrency venture associated with the Trump family.

Approval of World Liberty Trust Company

The Office of the Comptroller of the Currency (OCC) granted conditional approval to the World Liberty Trust Company (WLTC) for a national trust bank charter. Senator Warren, a prominent Democrat on the Senate Banking Committee, labeled the approval as an unprecedented conflict of interest. She remarked, “President Trump is now the first President in history to approve, operate, and supervise his own bank.”

Reactions to the Approval

“Critics are missing the point: World Liberty Financial is running towards regulation and continuous oversight, not away from it,”

stated David Wachsman, a spokesperson for World Liberty Financial. He emphasized that the proposed bank would be under strict federal supervision from the OCC. The goal is to ensure robust oversight that lasts beyond the Trump administration, with regular examinations of the bank’s operations.

Wachsman also highlighted that federal banking laws, including anti-money laundering and consumer protection requirements, would apply to WLTC. The OCC’s preliminary approval is seen as favorable for consumer and investor protection advocates and the American financial services industry.

Commitments and Conditions

The OCC’s approval letter mentioned passivity commitments from a Trump family-affiliated entity, which agreed not to seek board seats, influence management decisions, or control the bank. Ownership stakes of 10 percent or more would be held solely for investment purposes. Former President Trump has stated he does not manage World Liberty Financial or the Trump Organization businesses, leaving those responsibilities to his children.

Details of the Proposed Legislation

The “Ending Presidential Corruption in Banking Act” seeks to prevent the Federal Reserve, OCC, and Federal Deposit Insurance Corporation from approving banking applications involving high-level officials and their immediate families. The bill outlines conditions under which regulators cannot approve applications if a covered person owns more than 10 percent of any class of voting securities, serves as a senior executive, or otherwise exercises control over the bank.

Additionally, the legislation would require regulators to review previous banking approvals granted after January 20, 2025, potentially terminating charters or licenses if covered individuals owned or controlled the institution at approval. The act aims to make it unlawful for certain officials and their families to own or control a bank.

The Relevance of World Liberty Crypto Bank Approval

The OCC conditionally approved WLTC’s application for a national trust charter after the company’s January application. This charter, if finalized, would allow World Liberty to manage and hold assets for customers, settle payments, and support its USD1 stablecoin. Trust banks typically do not take deposits or make loans.

The application underwent standard review by the OCC’s career staff. Comptroller Jonathan Gould and staff were reported to have followed statutory duties and ethical obligations. Operational and governance controls, alongside capital requirements, are conditions before the bank can operate.

Implications for Trump’s Crypto Business

World Liberty Financial stands out as a key entity in the Trump family’s involvement in the cryptocurrency sector, a priority in Trump’s second-term plans. The administration promoted pro-crypto policies, positioning the U.S. as a leader in digital assets, sparking debates over potential conflicts posed by Trump’s policy advocacy and business interests.

Reports revealed that USD1, the company’s stablecoin, reached about $4 billion in market value. Earnings from the stablecoin were estimated at $50 million for the Trump family through mid-2026, with World Liberty Financial bringing in over $1.6 billion for them by April.

Despite controversy, Trump dismissed claims that his family’s business dealings invite conflicts of interest. In a CNBC interview, he stated that, due to his presidency, any ventures his children pursue are subject to scrutiny.