Wall Street's biggest banks are reportedly making a concerted push to get the Federal Reserve to formally cement the supervisory reforms rolled out under President Trump's administration. Their goal: to make it harder for a future Democratic administration to reverse the changes.
At the heart of the push is a desire to resolve legal uncertainties around the softer process that has replaced what used to be called "matters requiring attention," or MRAs. These MRAs were a key tool for bank examiners to force lenders to fix risk management and control weaknesses. The shift away from them is part of the most significant overhaul of bank oversight since the 2008 financial crisis, according to a Reuters report on Tuesday.
Banks are looking to lock in their gains now, anticipating that Democrats—who tend to be more skeptical of Wall Street—might try to undo the changes if they return to power. The Fed is reportedly planning to provide more clarity on the issue.
Michelle Bowman, Trump's Fed Vice Chair for Supervision, has been leading these changes and has faced criticism for trying to reshape the Fed's supervisory culture and shift the balance of power toward bank management. She has defended her approach, saying she wants supervisors to focus on actual risks, not to weaken oversight.
According to the report, banks are pushing for clear written assurances from the Fed that supervisors won't upgrade observations to MRAs unless the underlying facts change. The Fed has signaled it will revise its 2013 public documentation around observations, which could provide more transparency.
The Federal Reserve did not immediately respond to a request for comment.
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