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Federal Deposit Insurance Corp. Acting Chair Travis Hill laid out 15 priorities for the agency Tuesday, including increasing transparency in bank-fintech partnerships, quickening the bank merger approval process and rehabilitating the agency’s workforce culture.
Hill teased several of the bullet points Jan. 10 in a speech at an American Bar Association event, where he advocated for bank supervision that focuses on core financial risks rather than on “process-related issues that have little bearing on a bank’s … financial condition or solvency.” (That surfaced again Tuesday.)
Some of the priorities should come as little surprise. The top bullet point – a “wholesale review” of the agency’s “regulations, guidance and manuals” – would be expected as the regulator transitions from the Democrat-appointed leadership of now-former Chair Martin Gruenberg, who left office Sunday, to that under Republican Hill.
More pointedly, though, Hill recommends, as a separate priority, that the agency “withdraw problematic proposals from the past three years,” including those touching on brokered deposits (or “hot money”) and corporate guidance.
Hill last summer criticized proposed changes to the FDIC’s hot money rules as “a poor use of our time and resources” because the deposit landscape is “too complex to continually decide which arrangements are brokered and which are not in a fair and risk-sensitive way.”
The bank merger bullet point, too, offers a direct 180-degree turn from Gruenberg-era policy. The FDIC board in September leaned toward requiring more details from merging banks, such as how much of a bank’s business is taken up by small-business or residential loan originations. The agency, at the time, considered looking at a merger’s potential competitive effects, too.
Hill, though, voted against the measure, saying it reflected a bias against mergers and held the potential to make the evaluation process “longer, more difficult and less predictable.”
Where the FDIC in September sought stricter recordkeeping requirements for fintechs partnering with bank, Hill advocated Tuesday – echoing his comments from earlier this month – for a “more open-minded approach to innovation and technology adoption, including … a more transparent approach to fintech partnerships and to digital assets and tokenization.” At the same time, Hill highlighted a desire to “address growing technology costs for community banks.”
