The Federal Deposit Insurance Corp. (FDIC) proposed tightening how bank examiners issue warnings and penalties, aiming to keep supervision focused on safety and soundness, according to report by Bloomberg.
Under the draft policy, which will go out for public comment, FDIC staff would be expected to cite banks only for “practices and acts that have caused or could be expected to cause actual financial harm to the bank.”
Acting Chair Travis Hill said the agency wants exam teams concentrating on issues that materially affect the risk of failure rather than “a litany of process-related items that are unrelated to a bank’s current or future financial condition.”
Hill added that supervisors must still be proactive. “Poor decisions a bank makes today may not show up in its financial metrics for an extended period of time,” Hill said, according to Bloomberg.
In a separate vote, the FDIC advanced a rule that would bar examiners from pressuring banks to close customer accounts on political, social, cultural, or religious grounds—an explicit response to allegations that conservatives are being “debanked,” the news outlet said.
Consumer advocates say evidence of widespread debanking is thin, but some critics argue examiners have leveraged reputational-risk notions to discourage relationships with politically sensitive clients.
Read more at Bloomberg