Prudential Regulator Hearing Highlights Bank Capital Reform
December 9, 2025
On December 2, the House Financial Services Committee (HFSC) held a hearing titled, “Oversight of Prudential Regulators.”
Committee members stressed the need to tailor prudential standards, index regulatory thresholds to inflation, and reevaluate capital and leverage requirements. Witnesses confirmed they are reviewing the entire capital framework and exploring efforts that promote indexing and simplification.
Witnesses included the following top financial regulators:
- Michelle Bowman – Vice Chair for Supervision, Board of Governors of the Federal Reserve System
- Jonathan Gould – Comptroller, Office of the Comptroller of the Currency (OCC)
- Kyle Hauptman – Chairman, National Credit Union Association (NCUA)
- Travis Hill – Acting Chairman, Federal Deposit Insurance Corporation (FDIC)
Bank capital requirements featured prominently during the hearing, with Vice Chair Bowman continuing to voice support for tailoring bank regulations based on institutional size, complexity, and risk.
- In response to HFSC Chair French Hill’s query on whether Congress should statutorily mandate periodic reviews of bank asset-based regulatory thresholds, Bowman agreed that indexing is a critical component of the regulatory framework.
- Bowman also shared that the Fed is conducting a comprehensive review of its entire regulatory framework to determine if the established categories remain fit for purpose.
Basel III proposal
- HFSC members asked Bowman if the prior Basel proposal’s changes to the p-factor were excessive. The p-factor is a key component in measuring capital requirements for securitizations and the proposed changes were one of CREFC’s main concerns with the previous proposal.
- Bowman explained that the regulatory agencies are developing the new Basel proposal from a risk-focused, bottom-up perspective: