On February 26, Fed Vice Chair for Supervision Michelle Bowman, FDIC Chair Travis Hill, Comptroller of the Currency Jonathan Gould, and NCUA Chair Kyle Hauptman testified before the Senate Committee on Banking, Housing, and Urban Affairs in a hearing on “Rightsizing Regulation to Promote American Opportunity.” The regulators outlined efforts to tailor oversight, modernize capital rules, streamline supervision, and implement the GENIUS Act’s framework for payment stablecoins (covered by InfoBytes here).

Chair Hill stated the FDIC is refocusing supervision on core financial risks, easing examinations for “well-rated” community banks, and creating an independent appeals office (covered here). He cited capital rule adjustments, rescinding leveraged lending guidance, restoring a prior bank merger policy (covered here), improving the speed of branch approvals, returning to the 1995 CRA framework, and issuing a proposal for licensing stablecoin issuers (covered here). Additionally, Comptroller Gould testified that the OCC is restoring risk-focused supervision, removing reputation risk from oversight, combating “debanking” (covered here), pursuing Basel III re-proposals, modernizing CRA requirements for community banks (covered here), advancing BSA/AML reforms, and encouraging AI and stablecoin innovation.

As for the Fed, Vice Chair Bowman reported a sound banking system but warned of growing nonbank competition in lending. She stressed tailoring regulation for community banks, updating “outdated” thresholds under laws such as the BSA/AML, refining capital frameworks including Basel III to support mortgage lending, ending reputational risk in supervision (covered here), and increasing transparency through ratings revisions and published manuals. Finally, Chair Hauptman outlined recent NCUA efforts, including the agency’s “Project Deregulation,” aiming to cut rules the agency deems to be obsolete (most recently covered here), a proposal for a stablecoin licensing process for credit unions (covered here), fostering AI and blockchain adoption, supporting small and minority depository credit unions, and expanding de novo chartering. He noted the system remains strong despite rising delinquencies, with nearly 90 percent of deposits insured and $22 billion in liquidity available.