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Regulation and compliance

Bank prudential regulators Senate testimony: Live coverage

ByClaire Williams, Ebrima Santos Sanneh, Maria Volkova, John Heltman
February 26, 2026 10:00 AM
Bowman Gould Hauptman Hill
From left, Federal Reserve Vice Chair for Supervision Michelle Bowman, Comptroller of the Currency Jonathan Gould, National Credit Union Administration Chair Kyle Hauptman and acting Federal Deposit Insurance Corp. Chair Travis Hill speaking in the House Financial Services Committee on Dec. 2.
Bloomberg News

WASHINGTON — The nation's top banking regulators will offer joint testimony in the Senate Banking Committee Thursday morning and are expected to face tough questions about a number of deregulatory initiatives put forth by the administration.

Federal Reserve Vice Chair for Supervision Michelle Bowman, Comptroller of the Currency Jonathan Gould, Federal Deposit Insurance Corp. Chair Travis Hill and National Credit Union Administration Chair Kyle Hauptmann are slated to appear in their first joint testimony in the upper chamber since President Donald Trump's inauguration last January. Senate Democrats last year pressed committee chair Tim Scott, R-S.C., to hold a hearing before the end of the year, which is required for the Vice Chair for Supervision and typically also includes the other prudential regulators. The regulators testified in the House Financial Services Committee on Dec. 2. 

The testimony comes at a time of major changes in the agencies and their policy trajectory. The FDIC and OCC have reduced their workforces significantly since the onset of the Trump administration, raising questions from Democrats about whether the agencies will be as effective in their supervisory mandates with a reduced workforce. The regulators will also likely face questions about the forthcoming Basel III endgame risk-based capital proposal, which Bowman has said will be published before the end of the first quarter.

The evening before the hearing, some committee Democrats — including ranking member Sen. Elizabeth Warren, D-Mass. — wrote to the regulators about the lack of use of disparate impact to racially-motivated lending. 

Democrats are also likely to ask about the rolling back of regulations for the largest banks — most recently with a revised enhanced Supplemental Leverage Ratio — as well as the recent uptick in applications for national trust charters by fintech and crypto firms, including from World Liberty Financial, a crypto firm owned in part by the Trump family. 

Republicans, meanwhile, are expected to highlight the regulators' efforts to tailor regulations for the smallest banks, seek input on how and whether to reform deposit insurance and ongoing efforts to make housing more affordable. 

13 Posts
41m ago

Alsobrooks questions cost of targeted deposit insurance hike

By Ebrima Santos Sanneh
About Ebrima Santos
EbrimaSSanneh
ebrima.sanneh@arizent.com
ebrima-santos-sanneh-2734b3146
Sen. Angela Alsobrooks, D-Md.
Sen. Angela Alsobrooks, D-Md.
Bloomberg News
Sen. Angela Alsobrooks, D-Md., who is partnering with Sen. Bill Hagerty on bipartisan legislation to raise the FDIC deposit insurance cap for business checking accounts in a "narrow, targeted manner" said she wants a "data driven reform that does not raise premium cost across the banking sector." 

Alsobrooks asked FDIC Chair Travis Hill whether he still agreed that "a limited increase is likely not to raise premium costs."

Hill replied, "I said last time it is possible that it would not result in increases." 

He explained that "if the FDIC did not make any changes to its assessments, an increase in deposit insurance would not have any impact on small banks. It would have a small impact on large banks, just based on the way that the current assessment formulas work."

However, Hill cautioned that regulators would "need to think about the potential impact on the reserve ratio."

"If you increase the amount of insured deposits in the system based on the way that the reserve ratio was currently defined, that would result in a decrease in the reserve ratio," he said

Treasury Secretary Scott Bessent endorsed the idea of increasing deposit insurance for business accounts during a House Financial Services Committee hearing earlier this month. While Bessent did not specify what the ideal heightened insurance cap would be nor endorse a particular legislative proposal, he said the current framework contributes to long-term consolidation in the banking industry, arguing that deposit insurance disparities are "one of the reasons we have seen assets leave small banks" and "one of the reasons that we have seen 50% of small banks disappear."
1h 0m ago

Warnock presses regulators on CFPB 'humility pledge,' virtual exams

By Ebrima Santos Sanneh
About Ebrima Santos
EbrimaSSanneh
ebrima.sanneh@arizent.com
ebrima-santos-sanneh-2734b3146
Rafael Warnock
Sen. Raphael Warnock, D-Ga.
Bloomberg News
Senator Raphael Warnock, D-Ga., asked each of the federal bank regulators about the Consumer Financial Protection Bureau's recently issued "humility pledge" that examiners must recite to supervised firms, as well as staffing cuts and all-virtual exams enacted at the CFPB.

Warnock said the Trump administration "has tried to fire about 1,500 employees from the CFPB, reducing the head count by roughly 80%," calling those reductions "an assault on the CFPB" that has produced "lopsided enforcement." Warnock added that in November, acting director Russell Vought announced "that all CFPB examiners will be reading a, quote, 'humility pledge' … before every examination," which Warnock described as an effort "to humiliate the remaining bank supervisory staff."

Warnock asked each regulator if they had ever implemented such a pledge, and each regulator said they had not. Warnock also asked each regulator whether their agencies currently require in-person components for examinations, noting that the CFPB is currently using virtual examination procedures exclusively. Each regulator responded that, save for COVID-era exceptions, they do require in-person components.

With time running out, Warnock said, "it's ironic to me … that the only bank regulator that aims to supervise the financial institution through virtual examinations is the CFPB." 

He added, "It's clear to me that acting [CFPB] director [Russell] Vought is working just to meet the bare minimum of the law, but certainly is not trying to abide by the spirit of the law. … He's trying to hobble the efforts of the CFPB to protect consumers."
1h 7m ago

Sen. Kim questions Fed independence in light of Powell, Cook probe

By Maria Volkova
About Maria
mvol4ok
Sen. Andy Kim, D-N.J.
Sen. Andy Kim, D-N.J.
Bloomberg News
Sen Andy Kim, D-N.J., asked Fed Vice Chair for Supervision Michelle Bowman to opine on whether efforts to push out Fed Gov. Lisa Cook and a probe into Fed Chair Jerome Powell over the renovations of the central bank's headquarters undermines the institution's credibility.

Bowman declined to comment on ongoing investigations, but did say that the central bank's independence from political influence "is of [the] utmost importance."

Bowman added a caveat, which is that the central bank's independence has to be balanced with transparency and accountability."I can assure you that I think the independence of the Federal Reserve is of utmost importance," she said. "But along with that independence comes the responsibility for accountability and transparency."
1h 33m ago

Gould: Burden for banks to collect citizenship info would be 'minor'

By Claire Williams
About Claire
byclairew
Jonathan Gould
Comptroller of the Currency Jonathan Gould.
Bloomberg News
In response to a question from Sen. Catherine Cortez Masto, D-Nev., Comptroller of the Currency Jonathan Gould dismissed concerns that banks collecting citizenship information would represent an unduly heavy compliance burden for banks. 

"I think the additional burden would be minor," he said. 

Gould said that, for people who do not have easy access to their birth certificates or who don't have a passport, there are alternative forms of paperwork, although he didn't specify what those alternative options would be. He said that employers already collect so-called I-9 employment eligibility data, which requires similar documentation. 

"Just like with an I-9, I think there are alternatives available," Gould said. "Banks have demonstrated an ability to find ways to know their customer under the existing framework."
1h 42m ago

Scott asks for info on steps taken to re-engage banks in mortgage

By Maria Volkova
About Maria
mvol4ok
Michelle Bowman
Federal Reserve Vice Chair for Supervision Michelle Bowman.
Bloomberg News
Senate Banking Committee Chair Tim Scott, R-S.C. asked for the Fed's Vice Chair for Supervision to elaborate on the central bank's efforts to encourage community banks to originate and service mortgage loans.

Bowman responded that regulatory proposals will be introduced in the near-term as a means to reengage both community banks and commercial banks in the mortgage space. 

"We're very focused, as we were thinking about the Basel approach in ways that we could right-size and recalibrate the approach for residential mortgage lending, so that we could encourage the banks to get back into the mortgage business," Bowman said. The Fed's top regulator highlighted that a massive shift has taken place in the past decade in mortgage lending, which has seen nonbank mortgage firms take the majority of market share.

Though changes are on the horizon to bank capital requirements, Bowman said that other regulatory matters need to be addressed in tandem to incentivize bank participation in mortgage lending. 

"CFPB regulations … put onerous requirements and large fines on banks for making mistakes in mortgage applications and things like that," she said. "So I think it's important that we think about this in a more broad manner and holistically."
1h 53m ago

Reed questions Bowman on relaxing bank enforcement

By Ebrima Santos Sanneh
About Ebrima Santos
EbrimaSSanneh
ebrima.sanneh@arizent.com
ebrima-santos-sanneh-2734b3146
Senator Jack Reed, a Democrat from Rhode Island, speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, D.C., U.S., on Wednesday, June 22, 2022. Photographer: Ting Shen/Bloomberg
Sen. Jack Reed, D-R.I.
Bloomberg News
Sen. Jack Reed, D-R.I., questioned Fed Vice Chair for Supervision Michelle Bowman over the Trump administration's bank regulators' decision to roll back a number of enforcement actions.

Reed said regulators "must penalize banks when they violate the law," noting that in recent months the Fed reversed "12 consent decrees against globally systemically important banks, [including] foreign domestic banks that facilitate mass tax evasion accounts with Iran." Reed also noted the OCC has lifted two separate actions against GSIBs and three against crypto-related banks. 

"I don't find it plausible that some of these banks have become models of acceptability," he said. "It seems as if you're just weakening enforcement policy."

Bowman pushed back, saying the agency had been considering these actions for years and works closely with the banks to decide when to lift enforcement actions. 

"It's important to understand that these enforcement actions and any MRAs have been in place for a number of years. … We've been working diligently with those institutions to help them understand what condition under what condition we would consider lifting any enforcement action or or MRA," Bowman said. "So if we have lifted any particular actions, it's because, over a long period of time, those institutions have acted in a way that allowed us to understand that they have mitigated those circumstances."

Reed countered that "one consent order was imposed in 2024 — that's 18 months ago."

"That seems to be a rapid time for most of these large financial institutions to suddenly do the right thing," Reed said. 

Bowman said she appreciated his concerns, "and I'd like to look into that a little bit more."
2h 3m ago

Gould: Regulators will 'take steps' if deposits flee due to stablecoin rewards

By Claire Williams
About Claire
byclairew
Jonathan Gould
Comptroller of the Currency Jonathan Gould.
Bloomberg News
Sen. Bernie Moreno, R-Ohio, one of the more pro-crypto lawmakers in Congress, asked bank regulators about the effect that stablecoin yield and rewards would and have had on bank deposits, addressing an argument that bank lobbyists have made as lawmakers debate key crypto legislation. 

"Does that pose an existential threat to the banking system?" Moreno asked. 

All the regulators said that they have not seen massive deposit flight, although many provisions of the GENIUS Act are not slated to go into effect until early 2027. 

Comptroller of the Currency Gould went further, saying that regulators could take steps if it did impact the safety and soundness of the banking system. 

"I can, I think, say with some certainty, that any significant deposit flight or material deposit flight would not go unnoticed, certainly by me, by you and other elected officials on this committee," Gould said. "And if there were to be significant deposit flight, I believe that I and other federal bank agency regulators would take steps, since that would rise to implicating safety and soundness concerns."
2h 8m ago

Warren asks if World Liberty named UAE shareholder in application

By Ebrima Santos Sanneh
About Ebrima Santos
EbrimaSSanneh
ebrima.sanneh@arizent.com
ebrima-santos-sanneh-2734b3146
Elizabeth Warren
Senate Banking Committee ranking member Elizabeth Warren, D-Mass., in 2024.
Bloomberg News
Sen. Elizabeth Warren, D-Mass., questioned Comptroller of the Currency Jonathan Gould over reported affiliations between World Liberty Financial and a senior United Arab Emirates official, asking whether the firm disclosed the official as a major foreign stakeholder in its pending national trust bank charter application.

Warren cited a Wall Street Journal report alleging that "the top spy in the United Arab Emirates, who is the [UAE] President's brother and the country's national security advisor," secretly acquired a 49% stake in former President Donald Trump's crypto company for "half a billion dollars." She noted that World Liberty Financial has "a bank charter application pending with the OCC," and asked Gould directly: "Did World Liberty disclose [this]?"

Gould refused to discuss the filing. "I'm not going to discuss the specifics of any application," he said.

Warren pushed back, asking "are you telling us you won't help [determine] whether or not they disclosed it? Do you acknowledge that it is supposed to be disclosed?" 

Warren then cited OCC rules requiring applicants to disclose "all principal shareholders" with at least a 10% stake and to submit biographical and financial disclosures, adding, "Failure to do so would be grounds for dismissal of the application." 

Because the application has not been dismissed, she said, "I assume the disclosure was made." She asked Gould to provide "an unredacted application" so she and Banking committee Chairman Tim Scott could verify compliance.

Gould declined to commit to producing the document, saying, "the only thing to which I will commit is following our established procedures," but added he would "be happy to entertain your request and discuss with my team and make sure that we're doing and affording you the same privileges that we have afforded past administrations."
2h 15m ago

Sen. Blunt Rochester questions Fed's skinny account proposal

By Maria Volkova
About Maria
mvol4ok
Sen. Lisa Blunt Rochester
Sen. Lisa Blunt Rochester, D-Del.
Bloomberg News
Sen. Lisa Blunt Rochester, D-Del., expressed concerns over risky nonbank's obtaining access to the Fed's payment rails via the creation of a skinny master account. Rochester asked the Fed Vice Chair for Supervision whether guardrails will exist to halt a firm's access to the account if it presents elevated risk. 

"If the Fed were to grant this access and later determine that a firm poses risks, does the Fed have clear authority to immediately suspend or terminate that access, we would need to ensure that we do have that access," asked Sen. RochesterBowman said she "believes [the Fed does]."

"So you believe we do, but we just need to clarify that you do actually have the authority," Blunt Rochester responded.
2h 23m ago

Kennedy goes hard on debanking 

By Claire Williams
About Claire
byclairew
Sen. John Kennedy, R-La.
Sen. John Kennedy, R-La.
Bloomberg News
Sen. John Kennedy, R-La., hinted at further action at debanking in an impassioned line of questioning that reflects the lawmaker's usual style in oversight hearings. 

"What in God's name was the Fed and some of your other agencies thinking when you allow banks to debank customers for reputational risk. Are you kidding me?" Kennedy said. "Why did you allow that to happen?"

Fed Vice Chairman for Supervision said that she was not the chair at the time the debanking occurred, referring to allegations that bank regulators participated in the debanking on a religious or political basis, a claim that has not been proven. 

"In my view debanking is never an appropriate activity," Bowman said. 

Debanking is a point that Republicans continue to push, and Kennedy hinted that legislation or other actions could be coming. He did not mention regulators' reputational risk supervision rollback, and said that regulators allowed the debanking to occur, rather than caused it. 

"Let me tell you folks, this isn't over yet," he said.
2h 39m ago

Hill touts 'unsafe and unsound' definition effort 

By Ebrima Santos Sanneh
About Ebrima Santos
EbrimaSSanneh
ebrima.sanneh@arizent.com
ebrima-santos-sanneh-2734b3146
Travis Hill
Federal Deposit Insurance Corp. Chair Travis Hill
Bloomberg News
In his opening remarks, Federal Deposit Insurance Corp. Chair Hill touted a joint proposal with the Office of the Comptroller of the Currency that would define "unsafe or unsound practices," saying the rule would standardize supervisory findings to ensure criticisms target only the most obvious financial risks. 

"The FDIC is actively implementing changes to our supervisory process to reorient our focus more toward financial risks and to improve other aspects of our supervisory frameworks. Framework, among other things, we are reviewing comments," and that FDIC has, "initiated a process to review outstanding supervisory criticisms, to close out those that do not align with the new approach to supervision."

Under the proposal, an unsafe or unsound practice would be one "contrary to generally accepted standards of prudent operation" that, if continued, is likely to materially harm a bank's financial condition or that of the Deposit Insurance Fund. 

Chair Hill said the proposal aims to give both banks and examiners clearer guidance, focusing supervisory scrutiny on actions that pose more tangible financial risks rather than procedural ones, adding that the FDIC is also reviewing potential reforms to the CAMELS rating system and its internal manuals. The board — composed of Hill, Comptroller of the Currency Jonathan V. Gould and acting Consumer Financial Protection Bureau director Russell Vought — approved the proposal unanimously and opened a 60-day comment period in October.
2h 44m ago

Senators hit familiar notes ahead of questioning

By Claire Williams
About Claire
byclairew
Scott Warren
Senate banking Committee Chair Tim Scott, R-S.C., left, and ranking member Elizabeth Warren, D-Mass., during a hearing in April 2025.
Bloomberg News
Senate Baning Committee Chair Tim Scott, R-S.C., and ranking member Elizabeth Warren, D-Mass., touched on their consistent talking points in their opening remarks during a hearing with the top bank prudential regulators. 

Scott praised regulators' efforts to tailor regulators for smaller, less risky institutions. 

"Our economy is growing and Americans are working, saving and investing, our financial system becomes stronger, not weaker," he said. "That is why getting the balance right actually matters a lot. One important step is making sure capital rules reflect real world risk." 

Warren, meanwhile, highlighted risks associated with rolling back oversight of the largest institutions. 

"The bank regulators have also terminated enforcement actions against JP Morgan, Wells, Fargo, Citigroup and Goldman Sachs, while failing to identify new law breaking on Wall Street," she said. "Either Wall Street bankers have suddenly stopped breaking the law or Trump enforcers are keeping their eyes deliberately closed. I'm betting on closed eyes. Warning lights in our overall economy are flashing. President Trump is bringing the next great financial crisis closer into view, yet his regulators seem determined to serve only Donald Trump."
3h 19m ago

Gould drops more hints on debanking probes

By Claire Williams
About Claire
byclairew
Comptroller of the Currency Jonathan Gould.
Comptroller of the Currency Jonathan Gould.
Bloomberg News
Comptroller of the Currency Jonathan Gould said that his agency is reviewing the largest banks for religious and political debanking, continuing to suggest banks were at least partially responsible for a purported wave of "de-banking" that occurred during the Biden administration.

"No American should be denied access to banking products and services because of. political or religious beliefs or lawful business activity. We are implementing President Trump's Executive Order on Guaranteeing Fair Banking for All Americans by, among other things, reviewing the activities of the largest national banks and investigating complaints of alleged debanking," Gould said in his prepared remarks. "We have also proposed a rule to eliminate reputation risk from supervision, a tool too often used to debank politically disfavored individuals or groups. We are intent on ensuring banks provide access to banking products and services based on individualized, objective, risk based criteria, not politics or ideology." 

Bankers and their lobbyists have repeatedly tried to shift the focus of debanking rhetoric toward regulators, who they say encouraged debanking as part of their supervisory exams. Trump's regulators have also extended their probes into the banks themselves. 
Claire Williams
Reporter, American Banker
Ebrima Santos Sanneh
Reporter, American Banker
Maria Volkova
Reporter, National Mortgage News
John Heltman
Washington Bureau Chief, American Banker
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