Regulatory Retreat: Trump's Softer Banking Supervision

U.S. bank regulators are scaling back the intensity of some examinations and reducing reliance on formal disciplinary notices, signaling a regulatory shift under President Donald Trump. Executives in the industry confirm that regulatory bodies, including the Office of the Comptroller of the Currency and the Federal Reserve, are easing measures on non-core banking issues, such as reputational risk and diversity.

The softer regulatory stance includes limiting examination scopes and opting for informal guidance over official notices. This is part of a broader strategy to focus on key financial metrics of safety and soundness. While officials aim for a risk-based approach, personnel cutbacks due to a hiring freeze have also contributed to the scaling back.

Critics, including Democrats and regulatory experts, advocate for a comprehensive supervision strategy, pointing to recent banking failures as evidence of insufficient oversight. Despite Trump's push for reform, transparent details on the changes remain sparse as regulators adjust their approaches, emphasizing financial risks over broader social and governance matters.