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Regulatory Whiplash
Pity the banker feeling a strained neck from whiplash lately. They should be forgiven. After years of heightened regulatory scrutiny, more intense examinations and new rules under President Joe Biden, banks came into 2025 anticipating a relaxed regulatory environment.
Just when the banking industry was ready to breathe a sigh of relief, a flurry of executive orders started coming from the new administration. President Donald Trump has signed 191 executive orders so far in 2025 — more than in the entire four years of Biden’s term, according to the Federal Register. Although some executive orders cancel rulemaking from the prior administration, they create their own compliance burden.
Going into 2025, the accusations of debanking both from the left and the right of the political spectrum had died down, but Trump recently revived the controversary. He issued an executive order directing federal agencies to review the matter and the Small Business Administration to write letters to financial institutions demanding a review of clients who might have been impacted by “politicized or unlawful debanking.”
A January executive order told the U.S. attorney general to recommend civil rights enforcement actions against private companies and other actions “to end illegal discrimination and preferences, including DEI,” which stands for diversity, equity and inclusion.
The pushback appears to have an effect. According to Bank Director’s Governance Best Practices Survey, only 40% of respondents said they considered race, ethnicity, gender or LGBTQ+ status when evaluating director candidates, down from 56% who said so in 2024. The survey was conducted in May 2025.
I’m getting ready to address some of this whiplash in a session at Bank Director’s Bank Board Forum, a conference that starts Sept. 8 in Marco Island, Florida. Although the conference spans the gamut from crypto to compensation strategies to serving on the audit committee, this session with Bart Smith of Performance Trust Capital Partners and Kevin Toomey of Arnold & Porter will look at the current regulatory environment. We’ll address what to expect in exams and whether all the changes are good for banks or just pose more risks.
If you have any input, drop me a line at nsnyder@bankdirector.com. I’ll be nursing my strained neck.
• Naomi Snyder, editor-in-chief for Bank Director
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