The Federal Reserve moved Thursday to lighten the regulatory load it places on bank boards of directors, saying that it wants directors to refocus on their core responsibilities of overseeing risks.
The central bank announced that it was soliciting feedback on proposals to eliminate or scale back some of the responsibilities it places on directors, ranging from oversight of energy loans to securitization.
After reviewing its oversight of banks, the Fed said in its request for comments, it learned that its expectations “for boards of directors and senior management have become increasingly difficult to distinguish.”
Thursday’s announcement is one step toward the goal of Republicans and the industry to reduce the Fed’s presence in bank boardrooms.
A June report from the Trump Treasury Department declared that the current regulatory regime places too many obligations on bank directors, finding that more than 800 provisions in law, regulation, and guidance apply to directors.
At the same time, however, the Fed is facing pressure from the Left to get more involved in the affairs of at least one bank board. Sen. Elizabeth Warren, D-Mass., in recent weeks has called for the Fed to remove the directors of Wells Fargo who were present for the bank’s fake accounts scandal.
