Big US banks wanted Michelle Bowman to be their new overseer at the Federal Reserve — and that's what they got.

President Trump on Monday named the Fed governor and former Kansas banking commissioner as his choice to be the next vice chair for supervision, which would make Bowman arguably the most powerful bank regulator in Washington, D.C.

Big Wall Street financial institutions are not hiding their approval for the pick.

"I'd be excited to see Miki Bowman appointed," Goldman Sachs (GS) CEO David Solomon said in a Fox News interview last week, after her likely appointment had been reported by several media outlets. 

"I think the industry would be excited."

REUTERS / Reuters

The reason is that Bowman is likely to take oversight of giant US banks in a new direction as the Trump administration makes it clear it wants to lift constraints on lenders and overhaul a regulatory framework put in place following the 2008 financial crisis.

Bowman's appointment is seen as "a major, bank-friendly shift," Ian Katz, a managing director with Capital Alpha, said last week.

Katz, for example, expects Bowman to be instrumental in releasing giant lender Wells Fargo (WFC) from a 2018 Federal Reserve consent order that restricts it from growing any bigger.

Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments

Bowman is also expected to revisit a new set of controversial capital rules proposed by former vice chair for supervision Michael Barr that would have required lenders to set aside greater buffers for future losses.

The requirements are based on an international set of capital requirements known as Basel III imposed in the decade following the 2008 financial crisis.

Bowman in a statement Monday night said if she wins confirmation from the Senate, she will "promote a safe and sound banking system through a pragmatic approach to supervision and regulation with a transparent and tailored bank regulatory framework that encourages innovation."

ERIC BARADAT via Getty Images

She may still face some opposition from Sen. Elizabeth Warren, the ranking Democrat on the Senate Banking Committee. 

Warren said in her own statement on Monday night that she has "deep concerns" that Bowman's appointment "will cause yet another cycle of Wall Street deregulation, bank crashes, and bailouts that put working families at risk while letting big bank executives off the hook."

For the moment, though, Bowman's nomination is a clear signal from the Trump administration that the White House does want changes made to how lenders are regulated.

Hopes for deregulation of the banking industry helped propel bank stocks higher following Trump's November election victory, along with optimism about a rebound in mergers, acquisitions, initial public offerings, and plain-vanilla lending.

But so far in Trump's second term as president, things have gotten a lot more complicated for banks and their investors as Trump's new antitrust cops also signal they aren't going to give a free pass to big mergers and new uncertainties surrounding the president's tariff plans leave many businesses unsure about when to make big moves.

The KBW Nasdaq Bank Index, a key index tracking the US banking sector (^BKX) climbed as much as 15% to its peak in February but has since erased its post-election gains over the past month and is now down 1% from election night.

Hopes for an M&A boom are also in question. Last week, Goldman Sachs trimmed its forecast for completed M&A deals in 2025, predicting that the increase in volume would now be 7% instead of 25%.

There are other ongoing complications for banks too.

Some are getting grilled over whether they "debanked" certain customers for holding conservative views or operating in the crypto industry.

The conflict began at Davos, Switzerland, in January when the president chided Bank of America (BAC) CEO Brian Moynihan and JPMorgan Chase (JPM) CEO Jamie Dimon. Both banks have denied the claim.

The president's family business has also filed a civil lawsuit against Capital One (COF), alleging that the major bank and credit card lender debanked hundreds of its business accounts in the aftermath of the Jan. 6, 2021, attacks on the US Capitol.

A Capital One spokesman told Yahoo Finance that it "has not and does not close customer accounts for political reasons."

Citigroup (C) has been snared in the new administration's political fights for a different reason.

The New York-based bank was sued by climate-focused nonprofit Climate United after it froze billions in federal grant money at the direct order of the Trump administration on Feb. 18. Citigroup is contracted as an administrator for some of the government's grant funding.

The Trump administration's EPA has halted $20 billion in grants to undergo a comprehensive review based on its concerns of "programmatic fraud, waste, and abuse, and misalignment with agency's priorities," EPA administrator Lee Zeldin said last week.

"Citibank has ... only done its best to serve its customers while following instructions from the government of the United States, to whom Citibank owes a duty of loyalty and at whose direction Citibank is contractually obligated to act," the bank's lawyer wrote in a case court filing published last week.

David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance