Senator Warren Urges Fed Chair to Not Weaken Bank Supervision Process
Earlier this month, Senator Elizabeth Warren—who serves on the Senate Committee on Banking, Housing, and Urban Affairs—sent a letter to Federal Reserve Chairman Jerome Powell expressing her concerns about potential efforts to weaken the Federal Reserve’s role in supervising banks. Specifically, she shared her concern about changes to Matters Requiring Attention (MRAs), which are tools used by bank examiners to communicate legal violations and other risks to financial institutions.
Senator Warren expressed apprehension that the changes to MRAs could harm consumers and diminish bank supervision.
Her letter came after last month, Federal Reserve Vice Chair for Supervision Randal Quarles stated in a speech that he supported limiting the use of MRAs to “violations of law, violations of regulation, and material safety and soundness issues.” Warren wrote that his “troublesome comments strongly suggest that the Fed intends to severely undermine the effectiveness of its examination program, which is one of its most potent tools to ensure the safe operation of banks and the protection of the consumers they serve,”
In her letter, Senator Warren warned that the changes would give examiners less discretion when requiring a bank to settle an issue. “That the Fed now appears to be going even further in weakening the bank supervision process signals an abdication of its responsibility to ensure a safe and sound banking system,” she wrote.
The Fed has provided little information to the public about when the changes will take place. Senator Warren has requested more information, and has also urged that the Fed halt the proposals that are planned to be implemented this week.
The letter came on the same day that Chairman Powell testified before the Senate Banking Committee. To read the senator’s full letter, click here.