Federal Reserve Focuses on Fair Banking Access and Streamlined Regulations
Washington, Friday, 25 September 2026.
Federal Reserve Vice Chair Michelle Bowman outlined plans to overhaul bank oversight, barring regulators from penalizing lawful business accounts while tailoring rules to boost financial stability and growth.
Federal Reserve Outlines Supervisory Priorities
Federal Reserve Vice Chair for Supervision Michelle Bowman presented crucial testimony before the Senate Banking Committee regarding the central bank’s regulatory oversight framework and current supervisory priorities [1]. The updates provide critical foresight for executive leadership and financial institutions navigating evolving compliance standards and capital requirements as of September 2026 [1]. Bowman emphasized that supervision and regulation must support a safe and sound banking system that fosters economic growth while also safeguarding financial stability [1]. This approach marks a distinct shift from previous policies, aiming to balance safety with innovation [1].
Regulatory Clarity and Fair Access
A key component of the testimony addressed the prohibition of regulators compelling banks to “debank” customers based on political or religious beliefs [1]. Bowman stated clearly that banking supervisors should never dictate which individuals and lawful businesses a bank is permitted to serve [1]. Additionally, the Federal Reserve has rescinded multiple policies previously identified as hindrances to banking innovation [1]. The practice of using “reputational risk” in supervisory programs has been officially terminated to prevent ambiguous concepts from influencing business decisions [1].
Banking Sector Health and Competition
Current data indicates the banking sector exhibits strong capital ratios and liquidity buffers, characterized by continued lending growth and strong profitability [1]. However, non-bank financial institutions are increasing their market share in lending and payments while operating outside the prudential capital and liquidity standards applied to regulated banks [1]. To address this, the Federal Reserve is prioritizing a tailored regulatory framework that distinguishes between large banks and community banks [1]. This aims to reduce stringent standards for smaller, less complex institutions while maintaining overall stability [1].
Future Frameworks and Stress Testing
Looking ahead, the Federal Reserve finalized the 2026 stress test scenarios earlier this month in September 2026 [1]. The Board is currently working to finalize Basel III capital requirements and is developing regulations for stablecoin issuers in accordance with the GENIUS Act [1]. Regulatory clarity regarding the treatment of digital assets is intended to facilitate responsible innovation post-September 2026 [1]. Bowman noted the approach is to calibrate the new framework from the bottom up, rather than reverse engineering changes to achieve predetermined outcomes [1].