US bank regulators narrow enforcement focus to financial risks, slashing actions by more than half

The three most powerful banking regulators in the US have collectively decided that less is more. The Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC have all pivoted toward a supervision model that zeroes in on “material financial risks” to bank safety and soundness, while deliberately pulling back from enforcement actions tied to procedural hiccups and reputational concerns. The numbers tell a stark story. Public enforcement actions across these three agencies dropped from over 500 in 2015 to just 245 by 2025. At the Federal Reserve specifically, the decline has been somewhere between 48% and 58% in recent comparison periods. What the new framework actually looks like The shift accelerated dramatically under the Trump administration. Fed Vice Chair for Supervision Michelle W. Bowman has been a driving force behind the realignment, pushing for examination processes that target genuine threats to bank stability rather than casting a wide net over every compliance checkbox. By 2026, the Fed introduced what it calls an “abnormal probability of abnormal harm” standard for enforcement actions related to unsafe or unsound practices. Regulators now need to cl...