Monthly Bank Regulatory Report (December 2024)

Client Alert  |  December 31, 2024

We are pleased to provide you with the final 2024 edition of Gibson Dunn’s monthly U.S. bank regulatory update. Please feel free to reach out to us to discuss any of the below topics further.

KEY TAKEAWAYS

• The incoming administration continues to take shape. Intended nominees for Secretary of the Treasury and Chairman of the Securities and Exchange Commission (SEC) have been identified and although President-elect Trump has not announced his intended nominees to lead the OCC, CFPB, FDIC and CFTC, all of those selections will influence significantly the agencies’ regulatory and supervisory priorities and enforcement activity.
• The Board of Governors of the Federal Reserve System (Federal Reserve) announced it intends to propose changes to its stress test procedures, including (i) seeking comment on the stress-test scenarios and models used to set banks’ capital requirements and (ii) averaging results over two years to reduce the year-over-year capital requirements changes resulting from the stress test.
• In his testimony before the U.S. House Committee on Financial Services, Acting Comptroller Hsu made clear his support for the U.S. Treasury Department’s “call for federal payments regulations and a chartering regime for nonbanks,” signaling his support for a “dual fintech” system modeled on the dual banking system, with “distinct roles for federal versus state authorities.”
• The Federal Reserve released its Supervision and Regulation Report highlighting the Federal Reserve’s current supervisory priorities and trends in supervisory ratings and findings for banks of all sizes, indicating that approximately half of large financial institutions (i.e., those with total consolidated assets of $100 billion or more) received supervisory findings for the governance and controls component of the Large Financial Institution Rating System.
• The Federal Deposit Insurance Corporation (FDIC) extended the comment period on its proposed rule for “custodial deposit accounts with transactional features” from December 2, 2024 to January 16, 2025, raising the prospects of a potentially substantially modified final rule—if adopted at all.

DEEPER DIVES

Economic and Financial Services Agendas Continue to Take Shape. Although President-elect Trump has announced his intentions to nominate Scott Bessent to serve as Secretary of the Treasury and Paul Atkins to serve as the next Chairman of the SEC, he has not yet announced his intended nominees to lead the OCC, CFPB, FDIC and CFTC. When coupled with known (and unknown) departures from the agencies, all nominees if appointed will influence significantly the federal financial services regulatory agencies’ regulatory, supervisory and enforcement priorities in the next administration.

• Insights. Even in the absence of publicly announced intended nominees, the industry has coalesced around certain…