Senate Banking Committee Chairman Tim Scott used an oversight hearing on prudential bank regulation with the Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency and National Credit Union Administration to applaud progress in ending debanking practices and removing “reputation risk” from federal bank supervision, while calling for a more balanced regulatory approach. In his opening remarks, Scott pointed to the Committee’s FIRM Act and President Trump’s Executive Order as reinforcing the principle that access to banking services should be determined by financial risk rather than politics or subjective “reputation risk” assessments. He argued that recent overregulation has constrained community banks and credit unions without materially improving safety and soundness, and urged capital requirements and other rules to better reflect real-world risk, including by rethinking proposals such as the Basel III endgame. Priorities also included modernising regulatory thresholds, updating prudential tailoring categories based on nominal GDP, focusing supervision on material financial risks, improving the independence and efficiency of the supervisory appeals process, supporting banks’ return to mortgage lending, and continuing implementation of the GENIUS Act to bring digital assets and stablecoins into clearer regulatory frameworks. Scott said he sent a letter to the banking agencies on 25 February 2026 supporting updates to the prudential tailoring categories and that he expects a proposal “sometime soon,” and he called for continued progress on GENIUS Act implementation.

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