Is the FDIC being dismantled? Unpacking claim

In March 2026, a rumor circulated online that U.S. President Donald Trump's administration was dismantling the Federal Deposit Insurance Corp. — the government agency responsible for supervising banks and insuring most bank deposits to maintain consumer trust of financial institutions and prevent future banking crises.

For example, one March 4 Threads post read (archived):

THEY ARE DISMANTLING THE FDIC. The FDIC protects depositors' money in banks, covering up to $250,000 per depositor per bank and includes accounts like checking, savings, money market and CDs. NO FDIC means no protections for your money. Please follow Critical Resistance on Substack. Here are some screenshots from an article Indivisble posted yesterday.

The Threads user referenced a Facebook post (archived) by an account called Indivisible Tennessee. Text in the Facebook post's image read, "The FDIC is being dismantled — most won't realize until it's too late." The claim also spread on X (archived), Reddit (archived) and elsewhere on Threads (archived).

While the Trump administration hasn't shuttered the FDIC as of March 9, 2026, it has cut some of the FDIC's staffing and budget, as well as deregulated some functions of the agency. The administration has argued this makes the FDIC more efficient and focused on its core mission, while critics see these changes as a gradual dismantling of the agency. Therefore, we have not assigned this claim a rating.

Origin of rumor

The Threads post and Indivisible Tennessee's Facebook post both linked to a Feb. 25, 2025, Substack article (archived) by an account called Critical Resistance — an anonymous blog analyzing current events that appeared to be where the claim originated from. The headline matches the text in the image Indivisible Tennessee shared, while the subheadline reads: "They are dismantling deposit protections before you notice—and making sure the wealthy move their money first. By the time the system locks down, you won't have time to. Here's how to get ahead of it."

Because the article was published about a month into Trump's second term, it largely focuses on what the author believed was going to happen based on early cuts to FDIC staffing and changes in its leadership, as well as on alleged reports that Trump's team considered the possibility of abolishing the FDIC before he entered office.

Critical Resistance did post a follow-up article on Jan. 13, 2026, but this post — which was linked to as an update in the February 2025 FDIC story — largely focuses on the Trump administration's threats to indict Federal Reserve Chairman Jerome Powell on criminal charges. An analysis on the state of the FDIC does not appear until more than halfway through the January 2026 article, when it highlights cuts to budget and staffing, as well as deregulation.

The 2026 Substack post correctly identifies cuts to the FDIC and its authority in the time since the 2025 article was published. The 2026 post does not claim the Trump administration was embarking on a new effort to dismantle the agency, as some social media users seemed to believe. Rather, it says the Trump administration has been continually downscaling the FDIC over time.

Snopes messaged the Critical Resistance Substack account and the Indivisible Tennessee Facebook account and emailed the FDIC for comment and will update this story if we receive replies.

FDIC cuts

On Dec. 16, 2025, the FDIC board approved the agency's 2026 budget. Then-acting FDIC Chairman Travis Hill, who was later appointed as the agency's chairman, wrote that the 2026 budget was a 16.4% decrease from the previous year. 

The decline, Hill wrote, was "driven primarily by a nearly 20% reduction in authorized staffing" and "a number of efficiencies." He said the FDIC reduced staffing by identifying areas "where headcount could be reduced without sacrificing our ability to fulfill our core responsibilities."

"The proposed budget continues to provide staffing and funding necessary to execute on our mission: supervising banks, insuring deposits, and resolving failed institutions," Hill added.

Critics of those cuts, which began in early 2025, argued that they exacerbated staffing shortages, making it harder to supervise banks and reduce the risk of bank failures that could lead to a banking crisis. Some critics have used bank failures from 2023 as examples, such as the collapse of Signature Bank. In an April 2023 report on its supervision of that bank, the FDIC said it "experienced resource challenges with examination staff that affected the timeliness and quality of [Signature Bank] examinations."

The FDIC is not funded by taxpayer dollars. While it's backed by the U.S. government, it's funded by premiums paid by banks and interest earned on the FDIC's Deposit Insurance Fund.

FDIC deregulation

In February 2026, Hill spoke to the Senate committee on banking to report on what he called improvements to the FDIC's regulations and supervision while again referring to the agency's core mission of "insuring deposits, promoting the safety and soundness of banks, and resolving failed institutions."

Hill described various ways the FDIC was loosening regulations on banks and cutting back its own abilities to supervise them. For example, the FDIC previously continuously examined nearly all of its supervised banks with at least $10 billion in assets. Hill told the Senate committee that the FDIC raised the threshold for being subject to this continuous examination process to $30 billion in assets.

Much of this deregulation has only been proposed and not yet enacted. Therefore it's still too early to know, with confidence, how exactly the regulation cuts have affected U.S. banking.

In February 2025, The Wall Street Journal wrote that Trump administration officials were discussing collapsing the FDIC into the Treasury Department, without Congress' approval, and merging it with other banking regulators. As of March 2026, the Trump administration had not yet gone through with such plans and had not publicly indicated that it was still seeking to dissolve the FDIC.

That doesn't necessarily mean the White House isn't still seeking to collapse the FDIC into the Treasury Department, just as Hill's promise to focus the FDIC on its mission doesn't necessarily mean that the FDIC won't ultimately be dissolved.

In sum …

As of right now, the FDIC is operational. It has a smaller staff and a reduced budget compared with the agency during the administration of former President Joe Biden. Under Trump, it has drawn back on some regulations, particularly in how it supervises certain banks. The Trump administration has argued these decisions are to make the FDIC more efficient, while critics have argued the changes impair the FDIC's ability to do its job.