Federal Reserve Board’s Bowman outlines initiatives to tailor community bank supervision including CAMELS review and leverage ratio revision

The Federal Reserve Board published welcome remarks by Vice Chair for Supervision Michelle W. Bowman at the 2025 Community Banking Research Conference, setting out priorities for modernizing and better tailoring supervision and regulation to the community bank business model. Bowman pointed to workstreams intended to sharpen focus on “core material financial risks” and reduce disproportionate compliance burdens, including a review of the CAMELS ratings framework, revisions to the community bank leverage ratio, consideration of improved regulatory treatment for mutual banks, and prioritization of efforts to help combat fraud. She also reiterated building blocks for a future community banking regulatory framework, including reconsidering and indexing asset-size thresholds used across the supervisory and regulatory regime, assessing regulatory tradeoffs and “hidden costs” of supervision and guidance, streamlining mergers and acquisitions review and approvals, and promoting new bank formation. She noted that, in the coming days, the Board will host a Community Bank Conference in Washington, D.C., to be livestreamed on the Board’s website.