Course Change Expected for Bank Regulators & Regulations MESSAGE FROM KBA PRESIDENT & CEO DOUG WAREHAM President Trump has wasted little time building a cabinet that will help him advance his “America First” agenda, which appears focused on strong border security, broadening the scope of federal tax cuts enacted during the President’s first term, and dramatic reductions for the size and scope of our federal government with the help of well-known entrepreneurs Elon Musk and Vivek Ramaswamy. President Trump’s return to the White House, with a very strong total of 312 electoral college votes, appears to have given the new administration ample momentum for a course change for America. Included in that change of course, will be the removal of Rohit Chopra as Director of the Consumer Financial Protection Bureau (CFPB), as well as the removal of Michael Hsu, the Acting Comptroller of the Currency. The anticipated departures of Chopra and Hsu, combined with the fact that current FDIC Chairman Martin Gruenberg has already announced his retirement effective Jan. 19, 2025, means new leadership for the CFPB, OCC and FDIC is a given. Since Gruenberg, Chopra and Hsu all sit on the five-member FDIC Board, this also assures a shift of political control for the FDIC Board from a 3-to-2 Democratic-appointee majority to a 3-to-2 Republican-appointee majority. Identifying new leaders for federal bank agencies will take time, and the appointments will require confirmation by the U.S. Senate. But once the dust settles, the Trump-led course change for federal bank regulators should be a game-changer for our industry. The election of President Trump will also bring changes to the makeup of the seven-member Federal Reserve Board, but it might take time for a shake-up at the Fed to occur. While historically there have often been Fed Board resignations coupled with a change at the White House, Federal Reserve Board Chairman Jerome Powell has stated publicly that he doesn’t intend to vacate his post atop the Fed Board. Powell’s current term as Fed Chair doesn’t expire until May 2026 and his current 14-year term on the Board doesn’t expire until January 2028. You’ll find the leadership and service terms for current fed governors on the next page, along with the breakdown of leadership at all of the prudential bank regulators. The expected course change for federal bank regulatory agencies does open the door for reconsideration, review and even repeal of various bank regulations that have been promulgated during the past four years under President Biden’s administration. The sidebar highlights a number of proposed and recently Proposed banking rules that could be withdrawn, delayed or amended: • Regulation II (debit card interchange) (Fed) • Overdraft Restrictions (CFPB) • Mortgage Servicing (CFPB) • Board Governance (FDIC) • Brokered Deposits (FDIC) Recent Final Banking Rules that could be revisited through the rulemaking process: • Community Reinvestment Act (Fed, FDIC, OCC) • 1071 Small Business Reporting (CFPB) • Credit Card Late Fees (CFPB) • 1033 Rule — Open Banking (CFPB) • Bank Merger Guidelines (FDIC and OCC) adopted rules and regulations that could get a second look or a rewrite in the months ahead. 6
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