“The Fed Is Asking Hard Questions About AI. Is Your Bank Ready?”
With many banks rapidly deploying artificial intelligence across their operations, examiners are increasingly focusing on data governance, vendor oversight, ownership, and model testing. This article outlines steps banks can take to prepare for heightened regulatory scrutiny.
“FDIC Moves to Modernize Confidential Information Disclosure Rules”
The FDIC has proposed amendments to its regulations that would expand the circumstances under which banks may disclose confidential supervisory information without prior approval. If finalized, the rule would make it easier to share CSI with outside advisers and transaction counterparties under confidentiality agreements, reducing administrative burden while preserving protections for supervisory information.
“Trump Brings the Culture War to Bank Regulation”
The OCC and FDIC proposed changes to the Community Reinvestment Act that would tighten standards for certain community development grants the agencies consider “activist” while reducing reporting requirements for many community banks. The proposal would also raise asset thresholds for CRA compliance.
“Beyond the Rate Race: Bank Deposit Growth Strategies”
Rather than competing primarily on rates, several community banks are pursuing deposit growth through stronger customer relationships and better use of data. This article discusses their efforts to offer targeted products, prioritize employee engagement, and use analytics to identify customer needs.
“FDIC Part 363 Reforms: New Audit Rules for Community Banks”
FDIC changes that took effect this year raised the asset thresholds for annual audits, internal control reporting, and certain audit committee requirements. More than 1,500 institutions are expected to see lower compliance costs.
“Trump's Capital One Accounts Closed After AML Review, Bank Says”
Capital One told a federal court it closed roughly 300 Trump Organization accounts in 2021 following an anti-money-laundering review, not for political reasons as alleged in an ongoing lawsuit. The bank is asking the court to dismiss the amended complaint, arguing the account closures were consistent with its established risk management procedures.
Fed Chair Kevin Warsh has taken a less prescriptive approach to communicating monetary policy, offering fewer signals about how the central bank would respond to inflation and economic shocks. Supporters say the strategy preserves flexibility, while critics argue it increases uncertainty for markets. Warsh has also maintained regular communication with President Trump, a departure from recent practice between presidents and Fed chairs.
In Other News
Charles Darwin’s 150-year-old suspicion on carnivorous plants was proven correct, the AI-focused hedge fund Situational Awareness nearly imploded after leveraged bets went wrong, and more employers are directing compensation increases away from across-the-board raises toward top-performing employees.
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