In a speech to the American Bankers Association Washington Summit, Federal Deposit Insurance Corporation (FDIC) Chairman Travis Hill provided an update on a multi-track effort to reshape the agency’s supervisory and regulatory toolkit, spanning examination practices, capital and liquidity rules, Bank Secrecy Act and anti-money laundering supervision, payment stablecoin rulemakings, and failed-bank resolution readiness. On supervision, the update covered a joint proposal with the Office of the Comptroller of the Currency to define “unsafe or unsound practices” and “matters requiring attention”, instructions to examiners to refocus on material financial risks and legal violations, a “lookback” of outstanding supervisory recommendations, and interagency work on CAMELS rating reforms. Consumer compliance supervision changes under consideration include shifting away from process and compliance management system assessments toward outcomes, narrowing pre-examination scoping, risk-focusing exams for smaller banks, adding guardrails on out-of-cycle “visitations”, and increasing the USD 10,000 aggregate consumer harm threshold used to determine the most severe violations, alongside a commitment to avoid retroactive restitution for actions taken before policy changes. On regulatory capital, Hill pointed to near-term finalization of proposed revisions to the community bank leverage ratio and described two interagency risk-based capital proposals expected later this month, one to implement the 2017 Basel agreement with U.S. deviations and a simpler “single stack” approach for the largest banks with opt-in for others, and another to improve risk sensitivity for all non-community bank leverage ratio banks, including in residential mortgage, consumer, and corporate lending, with consistent enhancements to securitization and collateral recognition across both proposals. Liquidity work includes exploring Liquidity Coverage Ratio changes to better address acute short-term stress, including allowing capped recognition of borrowing capacity at the Federal Reserve, and releasing findings from an FDIC study of deposit behavior at the three failed banks in 2023. The speech also previewed work with the Treasury Department on a new approach to implementing the Anti-Money Laundering Act’s risk-based objectives, and flagged rulemakings under the GENIUS Act that would include prudential requirements for FDIC-supervised payment stablecoin issuers and a planned proposal that GENIUS Act payment stablecoins are not eligible for FDIC pass-through deposit insurance, alongside clarification and consultation on the deposit insurance treatment of tokenized deposits. For resolution preparedness, Hill signaled plans to rescind the FDIC’s 2009 statement of policy that imposed additional restrictions on private investors in failed-bank purchases, and to explore an emergency “shelf charter” pathway to enable nonbanks to bid rapidly after a sudden failure, alongside expected proposed changes to the insured depository institution resolution planning rule later this spring. Next steps flagged in the remarks include an interagency CAMELS proposal in the coming weeks, publication of the two risk-based capital proposals later this month, public release of deposit run analysis in the coming weeks, and an insured depository institution resolution planning proposal later this spring, with consultation expected on the stablecoin deposit insurance treatment and tokenized deposit clarifications once proposals are issued.

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