Exclusive-US regulators cancel bank exams as Trump rollback gathers pace

By Nupur Anand and Lenh Nguyen

New York (Reuters) -Uus regulators withdraw some bank exams and said that the use of hidden disciplinary notifications, a lent, benefited from a softer touch under President Donald Trump’s administration.

In recent months, the currency auditor, Federal Reserve and Consumer Financial Protection Office postponed, scaled or canceled the bank exams. He said that the new, lighter approach is mostly valid for non -core banking issues such as reputation risk, risk of climate change, diversity and inclusion.

Supervisors also use a more specific language to explain what they will evaluate and adhere to the examination rule books.

The four sources adopt a softer approach to banks to solve problems. Authorities have long been released official disciplinary letters known as “issues that require attention” or “immediately requiring attention”. Banks complained that the notifications were extremely aggressive in both number and tone.

The inspectors began to focus less on these official notifications, and they began to focus on in favor of less formal communication aimed at directing banks to direct problems.

The changes are part of the efforts of Trump’s regulators to focus on the basic financial metrics that measure the safety and robustness of the lenders, but in some cases, the personnel crises caused by layoffs and a government forced the rented ice cream to withdraw into exams.

People who refused to be identified because the audit was confidential, mostly said that they have information about controlling changes in large and medium -sized banks.

Democrats and many regulators argue that solid control should take a holistic perspective on bank risks. They also state that the controller failures were partially responsible for the collapse of three lenders in 2023. As a result, the regulators began to increase the control in the later hours of that year.

Although the authorities appointed by Trump have promised to overwhelm the supervision they said that they were dragged far away from the basic financial risk management, the process is hidden and the authorities did not publish many details. Reuters’ first reported for the first time, how this concussion rapidly revealed the burden for the loans, and more shed light on lighting.

“OCC re -examines the audit approach to ensure that it complies with its legal mission and reflects a risk tolerance that allows banks to support economic growth,” said OCC, OCC, OCC. He said. The agency adapted the supervision of a bank to the size, complexity, business model and risk profile and added, “focus on material financial risks.”

The Fed spokesman refused to comment. A CFPB spokesman did not respond to comments requests.

Fed’s Vice President of the FED Michelle Bowman, a Trump appointed person, in June, as well as other changes, as well as the inspection ratings “more logical” approach plans to take the approach, he said.

Earlier this year, the Central Bank and other regulators announced that they would stop the policeification of the “risk of reputation”, the potential to harm a bank.

Trump management also made dramatic deductions on CFPB personnel and surveillance footprint.

Opaque and hostile

Bank exams are the cornerstone of regulatory surveillance. Those who examine the lenders traces on -site control and instruct the management to correct problems.

For decades, Fed and OCC exams have focused on key metrics, including capital, liquidity and management adequacy. Meanwhile, CFPB audits financial firms to comply with the Federal Consumer Financial Protection Law.

However, in recent years, exams have been expanded in a way that includes the examination of fields related to diversity, equality, equality and inclusion, as well as environmental, social and governance issues – the factors that banks have started to take into account lending and other business decisions. Banking regulators around the world have also increased the risk of lenders to exposure to climate change.

Bank groups complained that long and labor -intensive exams for years are extremely subjective and opaque, focusing on the process rather than risks and supervisors could be unnecessarily enemies against bank managers.

Large banks argued that post -Mortems officially distracted the attention of non -core problems and caused them to miss their deadly liquidity problems.

“It’s time to fight,” Jamie Dimon, JPMorgan Chase CEO, took several major regulatory attempts in October 2024. He said.

Many banks said, “They are afraid of fighting their regulators, because they will only come and punish you more.” “We have repeatedly sued our regulators, because things become unfair and unfair.”

(Reporting by Nupur Anand in New York and Pete Schroeder at Washington DC; Additional reporting of Saeed Azhar.