Senior Bank Regulators Grilled on the Hill, Provide Thoughts on Future
November 26, 2024
The House Financial Services Committee (HFSC) held a hearing on Nov. 20 with financial regulators from the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and National Credit Union Administration (NCUA).
During the hearing, regulators shared they would hit pause on major rulemaking until President-elect Donald Trump takes office. Additionally, Fed Vice Chair Michael Barr vowed to stay in his job through the end of his term, which ends July 2026.
- Fed Vice Chair of Supervision Barr told lawmakers the central bank would not move ahead with the Basel III endgame, the long-term debt proposal, or rules on bank liquidity before President Joe Biden leaves office. He added that he is looking forward to working with new colleagues at the OCC and FDIC to “get their policy input and perspectives.”
- FDIC Chair Martin Gruenberg said his agency would not finalize any of its pending proposed rules, including proposals on corporate governance, brokered deposits, and asset managers, until next year.
HFSC members still had questions about some of the changes Barr outlined in his September speech at the Brookings Institution.
- Pointing to a recent analysis of the changes, Chair Patrick McHenry (R-NC) expressed concerns that only 24% of the issues raised in comments were addressed.
- In his September remarks, however, Vice Chair Barr noted that all comments were still under consideration, even if not explicitly addressed by his outlined recommendations.
- Separately, Rep. Andy Barr (R-KY) emphasized the need for a “capital neutral” re-proposal of Basel III that not only brings about international harmonization, but also prioritizes American economic growth and competitiveness.
Another Fed Governor, Michelle Bowman, also shared her thoughts on regulatory policy during a speech on Nov. 20 at the Forum Club of the Palm Beaches, a Florida-based public affairs group.
As reported by American Banker, Bowman is one of two Trump appointees on the Fed Board of Governors and “has been floated as a potential successor to Michael Barr as vice chair for supervision, the agency's chief regulatory official.”
What they’re saying: Bowman argued for a pragmatic and balanced approach to policymaking that prioritizes statutory objectives, relies on data and analysis, and embraces transparency and accountability.
She also cautioned against regulatory overreach, noting the importance of the overturn of Chevron deference: