Senate Banking Committee Ranking Member Elizabeth Warren and Senators Jack Reed, Chris Van Hollen, Sheldon Whitehouse and Richard Blumenthal sent a letter to the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation urging them to rescind a proposed “safety and soundness” rule that would define “unsafe or unsound practice” and, in their view, weaken bank oversight by constraining enforcement and supervisory tools. The lawmakers argued the proposal would let examiners act only when harm is “likely”, rather than possible or plausible, and only when likely harm or loss is “material” without clear expectations for assessing materiality. They also contended the proposal is inconsistent with the plain meaning of the Federal Deposit Insurance Act and would go further by limiting formal supervisory communications such as “matters requiring attention”, which are not enforcement actions. The letter pointed to the three largest U.S. bank failures in 2023 and the role of weak oversight in the 2008 financial crisis, and asked the agencies to withdraw the proposal and reverse course swiftly.
U.S. Senate Committee on Banking, Housing and Urban Affairs 2026-02-06
U.S. Senate Committee on Banking, Housing and Urban Affairs Democrats urge OCC and FDIC to withdraw proposed rule redefining unsafe or unsound practice
Senate Banking Committee members, led by Elizabeth Warren, urged the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to withdraw a proposed "safety and soundness" rule, arguing it would weaken bank oversight by limiting enforcement tools. They highlighted concerns over the rule's definition of "unsafe or unsound practice" and its potential inconsistency with the Federal Deposit Insurance Act, citing past bank failures and the 2008 financial crisis as reasons for their opposition.