Federal Deposit Insurance Corporation (FDIC) Vice Chairman Travis Hill used a speech to outline preliminary views on policy issues he expects the agency to take up following a change in FDIC leadership on January 20. He argued for a supervisory reset away from process-driven findings toward core financial risks, a more open approach to bank innovation and technology adoption, and a pullback from climate-related initiatives. On supervision, Hill pointed to CAMELS “sensitivity to market risk” downgrades that can be driven by documentation and governance process issues even where interest rate risk resilience is strong, and called for changes to the way CAMELS is applied, updates to examination manuals, and examiner training to reduce checklist-driven outcomes. On innovation, he described steps that could include reducing examiner engagement and approval frictions for certain technology experimentation, reviving the FDIC’s innovation lab FDiTech, expanding hiring of staff with hands-on technology experience, and issuing clearer guidance on fintech partnerships, artificial intelligence, and digital assets and tokenization. He also advocated replacing case-by-case handling of crypto-related activities with transparent guidance on what is legally permissible and how to conduct activities safely, and linked this to addressing “debanking” by ending Choke Point-like practices and reassessing aspects of Bank Secrecy Act implementation that can incentivize account closures. On climate, he said the FDIC should withdraw from the Network for Greening the Financial System and should not introduce a U.S. climate disclosure regime for banks. On capital, he anticipated a possible 2025 reproposal of the “Basel endgame” package, urging a roughly capital-neutral starting point, reconciliation of the Fundamental Review of the Trading Book with the stress test global market shock, fuller treatment of issues raised by commenters, and consideration of broader capital topics such as credit risk transfers and the supplementary leverage ratio. Hill framed these as priorities he expects to be addressed in the coming weeks and months, with withdrawal from the Network for Greening the Financial System expected imminently after the leadership change. He also flagged additional areas he expects to receive attention over time, including merger and de novo policy, resolution readiness, liquidity, disclosure practices, deposit insurance, and workforce culture.
Federal Deposit Insurance Corporation 2025-01-10
Federal Deposit Insurance Corporation vice chairman sets out post leadership change agenda to refocus supervision reopen innovation policy and exit NGFS
FDIC Vice Chairman Travis Hill outlined priorities amid leadership changes, advocating a focus on core financial risks, bank innovation, and reduced climate initiatives. He proposed CAMELS changes, innovation lab revival, clearer fintech guidance, and transparent crypto regulations. Hill anticipated a 2025 reproposal of the "Basel endgame" and highlighted future focus areas like merger policy, resolution readiness, and deposit insurance.