Federal Reserve Releases New Guidance For Bank Oversight In Move

Michelle Bowman, Vice Chair for Supervision of the Federal Reserve Board of Governors, takes a seat for an open meeting of the Board of Governors at the Federal Reserve, in Washington, June 25, 2025. (AP Photo/Mark Schiefelbein, File) WASHINGTON (AP) — The Federal Reserve’s top banking regulator on Tuesday released new guidelines for the agency’s supervision of the financial system, earning praise from industry trade groups and criticism from her predecessor. In a set of sweeping changes, the principles call for bank examiners to focus on material financial risks and to “not become distracted from this priority by devoting excessive attention to processes, procedures, and... 29 but released Tuesday. Michelle Bowman, the Fed’s vice chair for supervision, said the principles will “sharpen” the central bank’s focus and build “a more effective supervisory framework.”

“By anchoring our work in material financial risks, we strengthen the banking system’s foundation while upholding transparency, accountability, and fairness,” Bowman said in a written statement. Bowman was named vice chair by President Donald Trump in March. Simpson Thacher is one of the world’s most respected law firms. But for us, this has never simply been a matter of size or rankings. It’s the direct result of our commitment to one founding principle. Our success is driven by that of our clients.

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On November 18, 2025, the Federal Reserve released a Statement of Supervisory Operating Principles that sets out changes to how Federal Reserve examiners should supervise banking organizations. The Statement translates Vice Chair for Supervision Michelle Bowman's stated priorities into concrete operating expectations for supervisory staff at the Federal Reserve Board and Federal Reserve Banks. Daisy Lin, Head of Marketing, Acceleron : 12/2/25 9:59 AM As the year winds down, the industry isn’t slowing. The Fed is signaling sweeping changes to bank oversight, the CFPB is instructing examiners to take a humility oath, and the penny shortage is prompting real operational strain for banks and merchants alike. Alongside this, institutions are accelerating into AI, digital assets, tokenized deposits, and navigating major developments in Banking as a Service oversight.

A new internal memo from the Federal Reserve signals one of the biggest rethinks of bank oversight in over a decade. The memo proposes moving away from examinations that devote excessive attention to processes, procedures, and documentation that do not pose a material risk. Instead, Fed examiners are instructed to lean more heavily on the work of state and federal banking supervisors and work more closely with state banking agencies to assess broader patterns that can create institutional... At the same time, the Consumer Financial Protection Bureau (CFPB) issued a surprising directive: bank examiners must take a “humility oath.” The pledge instructs supervisors to acknowledge uncertainty, avoid overconfidence in interpretations, and adopt... For community banks and credit unions, these changes could bring a more focused, risk-based exam process that reduces low-impact findings and decreases the burden of documentation-heavy reviews. Institutions with strong governance, transparent reporting, and disciplined risk practices may benefit from clearer priorities and a more predictable supervisory dialogue.

📡 The Risk Current. A series analyzing how evolving industry dynamics inform the work of risk and governance professionals. U.S. bank supervision is shifting toward a narrower view of risk management driven by the Federal Reserve Board (the “Fed”), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation... Federal Reserve Board releases information regarding enhancements to bank supervision (November 18, 2025). The Fed is changing its supervisory approach by prioritizing material financial risks and moving away from excessive attention on

processes, procedures, and documentation that do not pose a material risk to a firm’s safety and soundness. OCC Announces Additional Actions to Support Community Banks and Reduce Regulatory Burden (November 24, 2025). The OCC will shift its focus to risk-based supervision to focus on material financial risk and prioritize reforms at community banks. Specifically, the OCC announced it is issuing supplementary guidance that tailors the agency’s application of the Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) examination procedures for all community banks based on these banks’... Additionally, the OCC also announced that it is discontinuing its Money Laundering Risk (MLR) system data collection. The OCC states that this will improve the effectiveness and efficiency of BSA/AML compliance while reducing unnecessary burden on community banks.

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