The Trump administration is wasting little time making changes in Washington, D.C. Through the early work of the Department of Government Efficiency (DOGE) and the typical replacements of the various heads of federal agencies that come with a change in administration, President Donald Trump is signaling he is committed to changing the way the federal government operates.

The federal banking regulatory authorities are no exception. Each of the four primary bank regulatory agencies, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, Federal Deposit Insurance Corp. and Federal Reserve, will be led by new chiefs. The change in leadership of these agencies will affect the banking industry as a whole and, more importantly, the individual regional and community banks.

Thus far, the most significant changes are taking place at CFPB. On Jan. 31, 2025, President Trump appointed Treasury Secretary Scott Bessent as acting director of the CFPB, and shortly after assuming the post, he ordered the CFPB staff to cease rulemaking, pause litigation efforts and refrain from public communications. On Feb. 7, 2025, Bessent appointed Russel Vought as the agency’s acting director. His first acts were to order the CFPB offices to close for the week of Feb. 10 and for staff to cease all examination and supervision activity. In a final turn of the CFPB revolving door, on February 11 President Trump appointed Jonathan McKernan to be the permanent Director of CFPB.

McKernan’s most recent regulatory position was as a member of the Board of Directors at FDIC. He will take the helm at CFPB after Senate confirmation.

What will be the ultimate outcome of these pronouncements from CFPB remains unclear. However, financial institutions should not interpret these actions as a signal that compliance with consumer regulations, including maintaining appropriate risk management systems and staff, has been forgotten. It is likely that the new leadership at CFPB will usher in more industry-friendly approach to consumer compliance supervision and consumer protection than we have experienced in the recent past.

Should Michelle Bowman, a member of the Board of Governors for the Federal Reserve System, get the nod for the vice chair of supervision role at the Federal Reserve, the supervisory personality at the Fed could soften. Bowman has been a longtime vocal supporter of the banking industry. She is a proponent of the concept of tailored supervision — calibrating the regulatory requirements and expectations to the size, scope, complexity and risk profile of the institution being supervised. She also supports bank innovation and a transparent regulatory framework, enabling banks to innovate safely and soundly.

When it comes to regulatory agencies stifling banks’ efforts to expand their customer product offerings and customer bases, Bowman is a strong opponent. In a recent speech, she derided regulatory policies (express or implied) that resulted in disfavored customers or industries being debanked. If selected, Bowman would likely prove to be a solid ally for the industry.

Travis Hill at the FDIC has given the most concrete evidence that changes are afoot. In a speech delivered Jan. 10, 2025, shortly before his appointment as acting chair of the FDIC, he stated “the FDIC will soon embark on a new course across a range of issues, while still continuing to execute its key responsibilities and mission.”

He indicated his dissatisfaction with the process-focused examination method used by the FDIC — focusing on policies, procedures and checklists — as compared to his preferred method of concentrating on the actual risks reflecting in the bank’s financial records and reports. Further, he spoke disfavoringly about using the FDIC’s supervisory authority over banks to pursue environmental policy and indicated that he intends to withdraw the FDIC from the international organization known as the Network for Greening the Financial System. Finally, like Bowman, he commented negatively on debanking and favorably on making the FDIC more transparent and open to banks’ innovation efforts.
While there has been a flurry of activities within the regulatory agencies, it is still early in the game.

Furthermore, it is possible actions already taken or to be taken by the new agency heads will face legal challenges or action by Congress.

Banks will do well by keeping an eye on the official releases from the agencies, maintaining good lines of communication with their supervisory offices and continuing to operate in a safe and sound manner.