January 4, 2025 / VOLUME NO. 347

Supervisory Balance


If I could point to one key theme from Bank Director’s surveys in 2024, it would be the impact of regulation.


At the start of the year, our 2024 Risk Survey found more than three-quarters of senior executives and directors had heightened concern about regulatory risk, and 39% pointed to evolving regulatory requirements as a key strategic challenge. More than half who had a regulatory exam since March 2023 said their most recent exam was more stringent than prior ones.


By September, 40% identified regulatory compliance costs as a top three challenge in Bank Director’s 2025 Bank M&A Survey, the second most popular response behind deposit costs. “The regulatory pendulum is swinging so very far into the weeds that it is going to choke us,” wrote one responding CEO.


A Bank Director analysis finds a moderate upswing in public enforcement actions by federal bank regulators through November 2024 compared to the prior two years, including scrutiny on Bank Secrecy Act and anti-money laundering compliance. (Data for December wasn’t available as of publication.) Further, recent rulemaking has resulted in much back-and-forth in the courts, including lawsuits against the updated Community Reinvestment Act, and rules capping fees for overdraft and credit card late payments. 


Trump nominees to the various regulatory agencies will likely upend future rulemaking. So will a summer ruling from the Supreme Court that overturned the Chevron deference, ending a judicial practice that deferred the interpretation of laws to regulators when the intent of the law was unclear. 


Banks — and the public — benefit from regulation and supervision that ensure a safe and sound banking system. While feedback I’ve received from community bankers over the years indicates an appetite to dial back the regulatory burden, perhaps just as prevalent is a desire for consistency.


“The federal government, the Federal Reserve, banking regulators and examiners need to be consistent and get in touch with the realities of the real world,” wrote a survey respondent in September 2023, amid the intense supervisory pressure leading into the election year. 


The whiplash effect of shifting from a deregulatory environment to a more burdensome one — and back again — has been a veritable pain in the neck for the industry. Here’s hoping for some balance in 2025.


• Emily McCormick, vice president of editorial & research for Bank Director

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