Warren Presses Fed for Details on Reported 30% Cuts to Supervision and Regulation Team

Warren Presses Fed for Details on Reported 30% Cuts to Supervision and Regulation Team

"This wholesale deregulation comes right from Wall Street's wish list, increasing the likelihood of big bank failures, taxpayer bailouts, executive malfeasance, and economic devastation for the American public."

"It will not be Vice Chair Bowman who suffers the resulting economic pain-it will once again be working class Americans who will be left to pick up the pieces."

Text of Letter (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to Federal Reserve Board Chair Jerome Powell expressing concerns about Federal Reserve Vice Chair for Supervision Michelle Bowman's reported plans to cut roughly 30 percent of staff in the Fed's Division of Supervision and Regulation and pressing the Fed for details about the cuts.

"It also comes as financial regulators-including the Fed-are tying supervisors' hands, reducing loss-absorbing capital requirements, undermining stress tests, and loosening other safeguards," wrote Ranking Member Warren. "This wholesale deregulation comes right from Wall Street's wish list, increasing the likelihood of big bank failures, taxpayer bailouts, executive malfeasance, and economic devastation for the American public."

Ranking Member Warren laid out the importance of the Fed's Supervision & Regulation staff: "Its Division of Supervision & Regulation is specifically responsible for 'supervising-monitoring, inspecting, and examining-certain financial institutions to ensure that they comply with rules and regulations' and 'operat(ing) in a safe and sound manner.' It is also tasked with issuing rules, regulations, and guidance 'governing the formation, operations, activities, and acquisitions of financial institutions.' Supervision & Regulation staff play a key role in ensuring the integrity of our financial system, preventing the failure of financial institutions, and holding bank executives accountable."

The Ranking Member warned that further deregulatory actions, like reducing Fed supervision staff, could lead to another financial crisis: "Taking more cops off of the Wall Street beat only exacerbates this toxic mix of deregulatory actions that turn the clock back to the early 2000s. I am deeply concerned that President Trump's Vice Chair for Supervision is paving the way for another financial crash. It will not be Vice Chair Bowman who suffers the resulting economic pain-it will once again be working class Americans who will be left to pick up the pieces."

The Ranking Member concluded by calling for answers to her questions on the current size of the Fed's workforce, planned workforce cuts, and its ongoing capacity to adequately supervise and regulate large financial institutions no later than November 20, 2025.

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