FILE PHOTO: U.S. President Donald Trump gestures on the day he attends an event hosted by America250 in Des Moines, Iowa, U.S., July 3, 2025. REUTERS/Nathan Howard/File Photo

By Pete Schroeder and Arasu Kannagi Basil

(Reuters) -Travis Hill, the acting chair of the Federal Deposit Insurance Corp, has been nominated by U.S. President Donald Trump to lead the banking regulator permanently, a person familiar with the matter told Reuters on Wednesday.

If confirmed by the U.S. Senate, the FDIC nominee is widely expected to maintain a lighter enforcement stance, seek adjustments to bank capital requirements, and allow greater involvement of U.S. banks in crypto-related services.

Hill was seen as the frontrunner for the permanent role and has been the FDIC's vice chair since 2023. He takes over the top job from former chair Martin Gruenberg, who retired in January.

Hill's nomination has been received in the Senate and referred to the Committee on Banking, Housing and Urban Affairs, according to a congressional website.

He earlier served as senior adviser to then-FDIC Chair Jelena McWilliams during Trump's first term. The FDIC, set up in 1933 after the Great Depression, insures bank deposits and monitors financial stability.

"Travis's deep experience within the agency and across the financial policy ecosystem will serve the country well," Consumer Bankers Association CEO Lindsey Johnson said in a statement.

"America's leading banks look forward to working with him to strengthen consumer confidence, support innovation, drive economic growth and access to capital."

Prior to the FDIC, Hill served as a counsel on the Senate Banking Committee, where he helped the panel advance legislation to ease post-crisis rules for regional banks.

Under him, the FDIC has moved to ease oversight, including rolling back a Biden-era policy that increased scrutiny of large bank mergers.

In March, the regulator also announced that banks could engage in crypto activities without having to receive prior approval.

The move marked a shift in U.S. banking policy, easing a key barrier that had limited Wall Street's involvement in digital assets.

He has previously also criticized efforts by Democratic regulators to impose strict new capital rules on bigger banks, commonly known as "Basel III endgame."

Wall Street's top banks have lobbied against the proposed rules, arguing the tougher requirements would curb lending and put them at a disadvantage to foreign rivals.

The White House and the FDIC did not immediately respond to Reuters' requests for comment.

Bloomberg News first reported the appointment earlier on Wednesday.

(Reporting by Pete Schroeder in Washington and Arasu Kannagi Basil and Bipasha Dey in Bengaluru; Additional reporting by Saeed Azhar; Writing by Manya Saini; Editing by Leroy Leo and Anil D'Silva)