On October 30, Fed Vice Chair for Supervision Michelle Bowman emphasized the need for a pragmatic approach to bank regulation during remarks at an EGRPRA outreach meeting. Bowman noted that the regulatory system had become “overly complicated with often conflicting and overlapping requirements,” imposing significant costs on banks and their customers.

Bowman described the current EGRPRA review as an opportunity to eliminate outdated rules, reduce compliance burdens, and better tailor requirements to the size and risk profile of institutions. She stated that previous EGRPRA reviews failed to deliver meaningful burden reduction, noting many Fed regulations had not been “comprehensively reviewed” in over 20 years, and suggested that thresholds for applicability and benchmarks should be updated and indexed for economic growth and inflation.

Bowman discussed stakeholder feedback on issues such as supervisory frameworks, capital requirements, application processes, and data collection burdens. She noted the Fed was working to streamline requirements, including possible changes to the community bank leverage ratio, stress testing, and the enhanced supplementary leverage ratio. Bowman also referenced recent efforts to clarify mutual capital instrument issuance, support anti-fraud initiatives, and improve the review process for mergers and new bank formations. Bowman reiterated the Fed’s focus on material financial risks, reducing procedural burdens, and supporting innovation, highlighting recent changes to large bank ratings through the ongoing capital, asset quality, management, earnings, liquidity, and sensitivity to market risk (i.e., CAMELS) review, and the elimination of reputation risk as a supervisory factor.