Politics

Federal Reserve Vice Chair for Supervision Michael Barr says that while there has been some opposition to the recent overhaul of Community Reinvestment Act regulations, he expects that banks, supervisors and communities will adapt and thrive once it's fully implemented.

Rep. Andy Barr, R-Ky., a senior Republican on the House Financial Services Committee, said he intends to press Federal Reserve Chair Jerome Powell to refine the Basel III capital proposal before it is finalized.

After years of discussion among regulators, the Federal Reserve Board has approved changes to its CRA rules that will base compliance exams on where lending occurs rather than branch locations. The updates — set to take effect in January 2026 — also emphasize lending in lower-income areas as well as community development loans and investments.

Regulators will now accept feedback until Jan 16, 2024 — a six-week extension — concurrent with a Federal Reserve effort to gather additional information about the potential implications of the proposed capital changes.

The Federal Reserve vice chair for supervision says the failure of Silicon Valley Bank showed the shortcomings of the current stress testing regime.

At a Senate Banking subcommittee meeting, Republican and Democratic lawmakers both promoted the mission of community development financial institutions and warned of upcoming threats to their funding and proposals to revamp the CDFI certification process.

Federal Reserve Gov. Michelle Bowman shared some of her more pointed skepticisms about potential capital changes in a speech Wednesday, saying enhanced requirements could increase systemic risk.

The Federal Deposit Insurance Corp. issued a proposal requiring larger banks to implement a three-line-of-defense risk management model and increased board independence in response to observed weaknesses in corporate governance during past financial crises and recent bank failures.

The Federal Reserve's top regulator cited the financial crisis of 2008 repeatedly in a speech about the merits of new risk-capital standards — proposals that have drawn unprecedented fire from banking trade groups and members of Congress.

The Consumer Financial Protection Bureau plans to hire 75 employees in its enforcement division as it boosts investigations against "large market actors," according to an internal email obtained by American Banker.