There is more work to be done in modernizing the bank regulatory and supervision framework, Federal Reserve Vice Chair for Supervision Michelle W. Bowman said Tuesday (Oct. 6).
In a speech delivered at the Community Banking Research Conference in St. Louis, Missouri, Bowman said that over the past two years the Fed has acted to support community banks by refocusing its supervision on risks that could impact a firm’s financial condition, by working with banking agencies to update the community bank leverage ratio and by eliminating the Novel Activities Supervision Program to support community bank innovation.
One area in which work remains to be done is mergers and acquisitions. The Federal Reserve’s competitive analysis in bank mergers disproportionately affects rural banks in small and underserved markets and understates the competition these banks face, Bowman said.
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“This analysis is antiquated and harmful to community banks that may face greater difficulties in merging, even when doing so may actually create a stronger and more competitive banking environment,” Bowman said.
Bowman also highlighted de novo formation and said that the Federal Financial Institutions Examination Council (FFIEC) issued a statement in June reaffirming its support for de novo bank formation.
“While this was an important show of broad-based support for de novos, federal and state banking agencies can and should do more to promote new bank formation — including clarifying approval standards (like capital requirements), adhering to specific and reasonable processing timelines, and issuing conditional approvals where appropriate,” Bowman said.
A third area in which work remains is in rationalizing and streamlining the call report, Bowman said, referring to the Consolidated Reports of Condition and Income.
“The FFIEC issued a request for information on call report streamlining in December 2025, seeking public comment about excessive burden on banks that file the call report and requesting stakeholders to identify options for streamlining,” Bowman said.
PYMNTS reported in June 2025, when Bowman was sworn in as vice chair for supervision at the Federal Reserve, that past speeches and papers showed that Bowman might drive a rollback of several regulations, with a guiding principle that seeks to relax some mandates on smaller financial institutions, and address risks in the system.
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