Treasury Secretary Scott Bessent has shared steps the Trump Administration plans to take to drive a “community bank comeback.” Specific priorities include reforms to the rating system, new processes for monitoring examiner compliance with supervisory policy, mechanisms for independent appeals of supervisory criticisms, and coordination to avoid duplicative examinations by different regulators.

The Trump Administration will also:

• review core platform providers, “including contract terms that prevent community banks from innovating for the future.”
• revisit the community bank leverage ratio, that may “culminate in a proposed reduction in the community bank leverage ratio.”
• work with FinCEN and bank regulators on a new rule to define the requirements for an effective AML/CFT program.
• support congressional efforts to modernize the deposit insurance framework, including “increasing FDIC insurance limits on noninterest-bearing transaction accounts.”
• focus on modernizing the capital framework to end “the capital arbitrage that drives bank lending to nonbanks,” noting that “[t]his will likely entail reduced capital requirements for large banks on mortgage loans, investment-grade corporate loans and some other important exposures. We must therefore ensure parity by giving smaller banks at least the option to benefit from these reduced requirements.”

Author: sdbrownlow

Student of Design