Federal Reserve considers raising bank oversight asset thresholds

The Federal Reserve is considering raising asset thresholds that trigger stricter regulatory oversight for large banks. The proposed changes aim to account for inflation and economic growth since the current thresholds were established in 2019.

Under the potential plan, the lower threshold for certain requirements could rise from $100 billion to approximately $150 billion. The highest threshold, which currently sits at $700 billion, could be increased to roughly $960 billion or even $1 trillion. These thresholds dictate requirements for stress tests, liquidity, capital, and regulatory reporting, which often cost banks tens of millions of dollars annually in compliance and risk management infrastructure.

Major regional lenders, including US Bancorp, Capital One Financial, PNC Financial Services, and Truist Financial, are identified as potential beneficiaries of the change. By raising these limits, the Fed could allow these institutions more room to grow their balance sheets before being pushed into more intensive supervisory categories. Federal Reserve Vice Chair for Supervision Michelle Bowman has previously noted that the current regulatory system has become overly complicated and imposes significant costs on banks and customers.