In opening remarks at the Federal Reserve Bank of Atlanta’s 2026 Banking Outlook Conference, Federal Reserve Board Vice Chair for Supervision Michelle W. Bowman outlined supervisory and regulatory priorities focused on stronger tailoring for community banks, modernization of large-bank capital rules, and a shift in supervision toward core, material financial risks. She said the Federal Reserve has begun a comprehensive review of all outstanding safety and soundness Matters Requiring Attention (MRAs) for state member banks and holding companies, with MRAs that do not meet standards to be downgraded to nonbinding supervisory observations. The agenda for community banks includes reviewing merger and acquisition and de novo chartering processes, streamlining applications, and updating the competitive analysis framework to better assess competition among small banks, alongside ongoing work on proposed changes to the community bank leverage ratio and a planned revisit of the mutual bank capital framework. For large banks, Bowman highlighted work across the “four pillars” of the capital framework: a recent stress testing proposal to disclose models and the scenario design framework, finalized 2026 stress test scenarios, joint final changes with the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation to the enhanced supplementary leverage ratio for U.S. global systemically important banks, continued work to advance U.S. Basel III implementation including adjustments to the capital treatment of mortgages and mortgage servicing, and refinement of the G-SIB surcharge framework. On supervision, she pointed to supervisory operating principles published in October that direct examiners to prioritize vulnerabilities that could drive financial deterioration or failure while maintaining focus on areas such as cybersecurity. Bowman said the MRA review is expected to be completed by the end of June, while work continues on community-bank leverage ratio changes, the mutual bank capital framework, Basel III implementation, and further capital reforms.
Federal Reserve Board 2026-02-19
Federal Reserve Board launches review of outstanding safety and soundness MRAs and sets out next steps on bank capital reforms
Federal Reserve Board Vice Chair for Supervision Michelle W. Bowman, at the 2026 Banking Outlook Conference, outlined priorities including tailored supervision for community banks, modernization of large-bank capital rules, and a focus on core financial risks. The Federal Reserve is reviewing safety and soundness Matters Requiring Attention (MRAs) for state member banks, with non-compliant MRAs to be downgraded. Key initiatives include revising the community bank leverage ratio, mutual bank capital framework, and advancing U.S. Basel III implementation.