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Going into May, bankers are up against a host of industry changes such as mass layoffs at the Federal Deposit Insurance Corp., a major data breach at the Office of the Comptroller of the Currency, the glimmer of enforcement action from the Consumer Financial Protection Bureau and more.
How Joseph Otting plans to pull off Flagstar’s turnaround
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A little more than a year ago, the future of New York Community Bancorp was unsettled, at best.
The Long Island-based company, which dominated the New York City multifamily lending space for decades, was ill-equipped to deal with the rapid growth that stemmed from two hefty acquisitions — Flagstar Bancorp in late 2022 and remnants of Signature Bank in early 2023.
The bank was trying to claw its way out of a dangerous situation: Its commercial real estate portfolio was stressed, its stock price had plummeted and customers were yanking out deposits.
In the first quarter of this year, the bank reported a
FDIC aims to cut 1,250 staffers across ‘most’ departments
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The Federal Deposit Insurance Corp. plans to eliminate roughly 1,250 positions across most departments, according to an internal email sent to staff on April 21 and obtained by American Banker.
The cuts come as part of the second phase of the regulatory agency’s plan to reduce staff, which was submitted in April to the Office of Personnel Management and the Office of Management and Budget. The plan aligns with the Trump administration’s broader workforce streamlining effort, known as the Workforce Optimization Initiative that the new Department of Government Efficiency is leading.
“The FDIC plans to reduce staffing by approximately 1,250 positions across most divisions and offices,” the email told employees. “Some of these abolished positions include those eliminated through OPM’s deferred resignation program that closed in February and the discontinuation of some non-permanent positions. Of the remaining positions, some are currently vacant but many are occupied by staff and managers.”
Fed regulation takes backseat in independence fight
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Federal Reserve officials are battling to maintain their political independence on monetary policy, but the same cannot be said for their regulatory and supervisory authorities.
Instead, central bank officials have downplayed their ability to set their own banking oversight policies rather than boisterously defend it from the Trump administration’s efforts to bring it
Some policy analysts and observers see the Fed’s disparate treatment of its authorities as a pragmatic choice. Facing pressure on multiple fronts, Karen Petrou, managing partner at Federal Financial Analytics, said the Fed was wise to bolster its monetary independence — and fortunate to have had it explicitly exempted from the Trump administration’s overtures.
Elliott O’Donovan
How Chainlink Labs CEO sees tariffs affecting DeFi
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Sergey Nazarov, co-founder of Chainlink and CEO of Chainlink Labs, sees a clear case for decentralized finance and blockchain adoption as markets reel and global trade relations strain as a result of President Donald Trump’s tariff war.
Chainlink is a decentralized oracle network that connects external off-chain data to blockchain smart contracts. Because it uses open-source infrastructure, any blockchain can connect to off-chain data through Chainlink and contribute.
The Chainlink platform has enabled more than $20 trillion worth of trading transactions across several blockchains with more than 2,200 projects spanning from decentralized finance to capital markets, according to the company.
CFPB shifts enforcement to states, stops nonbank oversight
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The Consumer Financial Protection Bureau plans to dramatically scale back its operations by shifting enforcement and supervisory work to the states and halting oversight of all nonbanks and Big Tech firms, according to an internal memo.
On April 16, CFPB Chief Legal Officer Mark Paoletta sent a memo to the bureau’s staff listing 11 priorities for the year ahead. The memo states that the bureau will refocus its efforts on supervising large banks over nonbank competitors, some of which offer nearly identical products and services, noting that in 2012, 70% of the bureau’s supervisory efforts were directed at banks.
“To focus on tangible harms to consumers, the bureau will shift resources away from enforcement and supervision that can be done by the states,” according to the memo, which was posted
CFPB is back to doing enforcement again … sort of
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The Consumer Financial Protection Bureau has restarted enforcement activity on a limited basis, with a focus on violations involving service members and joint cases with state attorneys general, according to sources at the bureau and internal communications.
The CFPB had 37 pending enforcement cases when the Trump administration took over the bureau. In February, acting CFPB Director Russell Vought halted all enforcement actions and quickly dismissed at least nine cases, including lawsuits against
Meanwhile, nearly a dozen cases filed under former CFPB Director Rohit Chopra during the Biden administration remain on hold for at least another month, including lawsuits against
Why fintechs have been buying up banks
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Fintechs looking to gain the benefits of bank charters are starting to acquire them again by buying up banks.
After several years of almost no fintech/bank M&A activity under the Biden administration, the Office of the Comptroller of the Currency approved a deal for
“We will now be offering loans nationally, and we will be taking deposits to fund those loans,” SmartBiz CEO Evan Singer told American Banker. “We will also be originating loans on our own balance sheet. We can be more efficient doing it ourselves instead of relying exclusively on partner banks, ultimately providing a better experience for small businesses.”
Bloomberg News
Republicans spell out demands for bank regulators
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Leading Republicans on the House Financial Services Committee released a flurry of letters to key bank regulators asking for them to rescind or alter rulemaking from the Biden administration.
Lawmakers, led by committee Chairman French Hill, wrote to the heads of several financial regulators — including the Treasury Department, the Federal Deposit Insurance Corp., the Federal Reserve, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau — with a laundry list of bank regulations they would like to see rolled back or done away with under the Trump administration.
For all the prudential regulators, the lawmakers asked that they roll back the revamped Community Reinvestment Act, a 1977 anti-redlining law that bank regulators updated the
OCC falls victim to major cybersecurity breach
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The Office of the Comptroller of the Currency experienced a significant email system security breach, according to the agency, which notified Congress of the hack on April 8.
According to an agency release, a high-level user account with administrative privileges over the OCC’s email system was breached, revealing highly sensitive information about one of the banks regulated by the OCC. The OCC regulates nationally chartered banks, which include some of the largest and most systemically important firms in the country.
“The OCC discovered that the unauthorized access to a number of its executives’ and employees’ emails included highly sensitive information relating to the financial condition of federally regulated financial institutions used in its examinations and supervisory oversight processes.” the agency said in a release.
Capital One-Discover merger is a go — now come the costs
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Days after winning regulatory approval for its blockbuster acquisition of Discover Financial Services, Capital One Financial said its expectations for what the integration will cost haven’t changed.
The $35 billion transaction has been and will remain costly, but Capital One Chairman and CEO Richard Fairbank said on the company’s first-quarter earnings call that the $1.5 billion estimate for integration expenses during 2027 remain intact — except shifted out by about six months to account for the deal’s longer-than-expected regulatory review.
Fairbank told analysts on an April 22 call that he thinks this transaction is different from other acquisitions, where the goal is “to take two companies, squash them together and rip out the costs.”