Regulatory relief

Regional banks were the ultimate winners in the Federal Reserve’s proposal to tailor supervision, but rules for the biggest banks remained largely unchanged.

The next downturn will come sooner rather than later, so bankers should press policymakers for several core improvements to the financial system before attitudes in Washington change.

In a highly anticipated proposal, the central bank outlined a new approach for its post-crisis supervisory program that divides banks into different tiers based on size.

Payday lenders scored a victory when the bureau committed to proposing changes next year, but they expressed disappointment that the revamp will not address a key payment-processing provision.

The Federal Reserve Board’s meeting to discuss supervisory standards for midsize institutions will be closely watched by regulatory relief advocates and those who want the Fed to maintain its firm hand.

Wells Fargo puts two top execs on leave as scandal's reach grows; regional banks freed from SIFI label lobbying regulators hard for more relief; FDIC to launch innovation office to help banks compete with fintechs; and more from this week's most-read stories.

The agency wants to change underwriting requirements in the regulation that lenders say will put them out of business, and give companies a break on the compliance deadline.

The central bank will hold an open meeting Oct. 31 to discuss changes to the enhanced supervisory regime as required by the regulatory relief bill passed in May.

Despite headlines touting a handful of populist candidates this election season, moderate Democrats will still have a significant role to play if the party takes the chamber in November.

Bankers say the agencies’ proposed rewrite of the trading ban would do more harm than good, while the Volcker Rule’s most ardent supporters worry the overhaul will enable risky behavior by the largest institutions.