The Fed Is Cutting Bank Oversight. Critics See Risks. [View all]

Source: NYT

Full/gift article at link.


"Top officials at the Federal Reserve’s Washington headquarters and 12 reserve banks received a short memo on Oct. 29 with an unmistakable message. The way the central bank had long monitored and addressed risks across the financial system was in for a drastic overhaul.

The memo, which was reviewed by The New York Times, contained a list of directives for Fed examiners and supervisory staff across the country that significantly curtailed how closely they scrutinized lenders. It followed a host of changes made by Michelle W. Bowman, a Fed governor, who since becoming vice chair for supervision at the start of the summer had been providing regulatory relief to banks. One day after the memo was sent, Ms. Bowman announced a 30 percent cut in staff across her division in Washington.


... The Fed is not the only financial regulator undergoing upheaval to align with the Trump administration’s vision. The president wants more sway over how the central bank and other independent institutions, like the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, oversee Wall Street. In January, Mr. Trump signed an executive order establishing more authority over rule changes.


... Before Mr. Vought arrived, the bureau’s supervision department was its largest division, with nearly 500 analysts and examiners. The group scrutinized financial companies’ handling of products like checking accounts, car loans, mortgages and credit cards, and exposed improper fees, charges for services never provided, errant auto repossessions and wrongful foreclosures. The agency forced banks and other lenders to return nearly $20 billion to customers..."



Read more: https://www.nytimes.com/2025/11/17/business/fed-bowman-bank-oversight.html?unlocked_article_code=1.2E8.bGRm.rMRnSFP-BRO5&smid=url-share