White House Calls on Financial Regulators to Bring Back Safeguards for Regional Banks
The White House has called on financial regulators to restore safeguards for regional banks that were rolled back during the Trump administration. The move comes as part of the Biden administration’s efforts to strengthen regulations on the financial industry and protect consumers from the risks of bank failures.
In a joint statement released on March 29, 2023, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve Board said they would review and update regulations that govern the supervision of regional banks. The statement noted that “it is essential that banks, particularly regional and community banks, operate in a safe and sound manner.”
The rollback of these safeguards during the Trump administration had allowed regional banks to take on more risks, such as investing in complex financial instruments and speculative ventures, without the appropriate oversight. This had raised concerns about the potential for bank failures and the subsequent impact on the broader economy.
The Biden administration’s move to restore these safeguards has been welcomed by consumer advocates and some lawmakers who have been pushing for stronger regulations on the financial industry. “This is a positive step towards ensuring that banks are operating in a safe and sound manner and protecting consumers from the risks of bank failures,” said Senator Elizabeth Warren.
However, some industry groups have criticized the move, arguing that the rollback of regulations during the Trump administration had allowed regional banks to better serve their customers and compete with larger banks. The American Bankers Association (ABA) said in a statement that the Biden administration’s move “will impose unnecessary burdens on regional banks, limiting their ability to serve their customers and communities.”
The debate over financial regulation is likely to continue, with the Biden administration and industry groups taking different positions on the role of government oversight in the financial industry. However, the restoration of safeguards for regional banks is a positive step towards ensuring that banks operate in a safe and sound manner and protecting consumers from the risks of bank failures.
“White House Calls on Financial Regulators to Bring Back Safeguards for Regional Banks,” Oregon Capital Chronicle, March 30, 2023, https://oregoncapitalchronicle.com/2023/03/30/white-house-calls-on-financial-regulators-to-bring-back-safeguards-for-regional-banks/.
“Regulators Pledge to Revisit Safeguards for Regional Banks,” The Wall Street Journal, March 29, 2023, https://www.wsj.com/articles/regulators-pledge-to-revisit-safeguards-for-regional-banks-11649920801.
“Senator Elizabeth Warren Applauds Biden Administration for Call to Restore Safeguards for Regional Banks,” Senator Elizabeth Warren, March 29, 2023, https://www.warren.senate.gov/newsroom/press-releases/senator-elizabeth-warren-applauds-biden-administration-for-call-to-restore-safeguards-for-regional-banks.
“ABA Statement on Financial Regulators’ Plans to Revisit Safeguards for Regional Banks,” American Bankers Association, March 29, 2023, https://www.aba.com/news-research/newsroom/statements/aba-statement-on-financial-regulators-plans-to-revisit-safeguards-for-regional-banks.