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The Federal Deposit Insurance Corporation (FDIC) was created during the Great Depression to restore confidence in a financial system shattered by the collapse of thousands of banks.

Today, in a time of distrust of government, the FDIC stands out in the alphabet soup of banking regulators as a rare agency trusted by many Americans. It has a long track record of protecting insured bank deposits, in good times and bad.

Still, it is unclear whether the FDIC can survive Trump 2.0.

Sources told CNN’s Kayla Tausche that allies of President-elect Donald Trump have discussed the possibility of dismantling the FDIC, giving the Treasury Department oversight of deposit insurance and allowing the federal government to significantly shrink or even close the rest of the agency.

Former regulators and scientists told CNN that it makes little sense to close the FDIC and that Congress is unlikely to green light such a plan.

“This idea would pose a tremendous risk of frightening Americans about the safety of their deposits and triggering a bank run,” said Patricia McCoy, a Boston College law professor and former federal regulator.

The FDIC provides a safety net through an industry-funded pool of money to protect customers in the event of their bank failing. Each depositor automatically receives at least $250,000 in insurance at every FDIC-insured bank with which they have money.

Aaron Klein, a senior fellow at the Brookings Institution, told CNN that while there are too many banking regulators in the United States, there is “no chance” that lawmakers would agree to shut down the FDIC.

“This is as logical as asking whether Trump can get rid of Wednesday and split it into Tuesday and Thursday,” said Klein, a former Treasury Department official who helped draft the Dodd-Frank law in 2010. “The FDIC’s brand equity for consumers is immense.” Millions of Americans trust the FDIC to protect their nest eggs.”

The Trump transition team did not respond to a request for comment.

Sheila Bair, who led the FDIC during the 2008 financial crisis when several major banks collapsed, called the idea of ​​abolishing the FDIC a “really bad idea” in a post on X.

“FDIC has a perfect track record of protecting insured deposits for over 90 years,” Bair said in her post. “A change in guarantor would cause confusion among depositors who take comfort in the ‘FDIC Insured’ sign on their banks.”

The FDIC’s operations, which include monitoring and auditing more than 5,000 banks and savings associations, receive no funding from Congress. His deposit insurance fund, which protects trillions of dollars in deposits, is financed by charging premiums to banks, not taxpayers. Sometimes these costs can be passed on to bank customers in the form of fees.

Sources told CNN that Trump’s allies have also discussed other efforts to streamline the powers of banking regulators, including transferring the Federal Reserve’s non-monetary powers to the Office of the Comptroller of the Currency and reorganizing the Consumer Financial Protection Bureau, an idea from Senator Elizabeth Warren.

Warren is not a fan of blowing up the FDIC.

“When rumors arise that banks may not have enough money to cover all their deposits, people rush to withdraw their money. “The FDIC deposit insurance is designed to reassure Americans that their money is safe,” Warren said in a statement to CNN. “I don’t know why anyone would want to create uncertainty about the FDIC’s commitment to financial stability or undermine a police officer protecting Americans from another financial crash.”

The idea of ​​abolishing or shrinking the FDIC, first reported by the Wall Street Journal, is reminiscent of Project 2025, the white paper from the conservative think tank Heritage Foundation that served as a blueprint for some conservatives for how Trump 2.0 should work.

Still, closing or merging banking regulators is not a new idea. Before the 2008 financial crisis, then-Treasury Secretary Hank Paulson proposed merging the Securities and Exchange Commission (SEC) with the Commodity Futures Trading Commission (CFTC) and merging the Office of the Comptroller of the Currency (OCC) with the Office of Thrift Supervision (OTS ).

Ultimately, Congress voted to close the OTC as part of the Dodd-Frank reform, but lawmakers also created the CFPB.

Some who favor tighter regulation of big banks were dismayed by the idea of ​​closing the FDIC.

“This is one of the dumbest ideas you can have, and it reflects how incredibly out of touch billionaires are,” said Dennis Kelleher, CEO of Better Markets, a government regulator focused on financial reform.

Kelleher praised the FDIC as one of the most successful agencies in American history and the “gold standard” for effectively dealing with bank failures in a way that minimizes losses for bank customers.

“In 2008, the FDIC played a critical role in stabilizing the financial system and ensuring that the Great Financial Crisis did not become a second Great Depression,” Kelleher said. “Abolishing or cutting the FDIC would be a disaster for the American people.”

Some conservatives also oppose dismantling the FDIC.

Steve Moore, a conservative economist who has advised Trump, told CNN he was “not in favor of closing the FDIC,” although he said it was necessary to consolidate banking regulators.

Douglas Holtz-Eakin, president of the American Action Forum, a center-right think tank, said he doesn’t think the FDIC will go anywhere because there are many supporters of the current system.

“People prefer the familiar,” Holtz-Eakin said. “For the banks it would be a leap into the unknown.”

Holtz-Eakin called the FDIC a “highly successful regulator.”

“It’s not like it’s a basket case,” he said.

This is not to say that the American banking regulatory system is perfect. There is room for improvement at the FDIC and its sister banking regulators.

The culture at the FDIC has come under fire in recent years amid allegations of a toxic workplace marked by sexual harassment, discrimination and bullying.

And some experts say there is a case for streamlining the confusing labyrinth of financial regulators, where some roles overlap.

“Our financial regulatory framework is nothing short of a Frankenstein’s monster,” said Isaac Boltansky, director of policy research at BTIG.

While Boltansky said there is an “indisputable argument” that the regulatory framework is ripe for an overhaul, he is having a hard time figuring out how this issue gets onto the agenda or gets support from Democrats

Still, it is unlikely that lawmakers would agree to shut down the FDIC.

Klein, a senior fellow at Brookings, noted that lawmakers overwhelmingly rejected a proposal to consolidate banking regulators after the 2008 financial crisis.

“It historically has almost no support in Congress,” Klein said.

It’s not even clear that the banking industry wants to close the banking regulator, because that could backfire.

“The industry loves to play regulators against each other,” said Ed Mills, Washington policy analyst at Raymond James.

The cumbersome banking regulatory landscape slows down the process of introducing new rules for banks because it is difficult to get all regulators on the same page. It can easily happen that the process gets stuck in bureaucracy.

While banks may be pushing for rapid deregulation under Trump, there is also the recognition that the political winds will change at some point. And if that happens, a banking regulator could quickly impose a crackdown.

“The banks wouldn’t want a super regulator if AOC (Alexandria Ocasio-Cortez) was president,” Mills said.

The Bank Policy Institute, a trade group that represents Bank of America, JPMorgan Chase, Wells Fargo and other major banks, declined to comment on the FDIC news.

Mills said there is “about zero percent chance” that the FDIC will be abolished under Trump, noting that such a move would require 60 votes in the U.S. Senate, which is a very tall order.

Mills sees the news of killing the FDIC not as a serious idea, but as a way to send a not-so-subtle message to Trump appointees.

“If they don’t follow Donald Trump’s regulatory agenda, an existential threat could be unleashed in the background,” Mills said. “In my opinion, this is a way to train the referee – before the referee even takes the job.”

CNN’s Kayla Tausche contributed to this report.