"We have revenue challenges, expense-line challenges," he said Wednesday at an Exchequer Club luncheon. "I'm not commenting on any particular regulation but it is a challenging headwind nonetheless. That challenge is really there for all sizes of banks."
Norton, who joined the FDIC in April, said that he preferred regulating based on risk profiles. "You can have [a midsize institution] with a very low-risk business model and then you can have a smaller institution with an aggressive lending" model, he said.
Norton faced questions about the costs of implementing Basel III and other topics. He said he had strong opinions on capital requirements.
For mortgage servicers, Basel III is a chief concern because it caps how much MSRs can count toward core capital.
Norton and FDIC director Thomas Hoenig were the lone directors to voice concerns about three proposals for the Basel III capital accord at a June meeting. Norton on Wednesday was unwilling to back a two-year delay of implementation.
"I'm not advocating a delay for Basel III," he said. "I think all things being equal, the trajectory for banks is okay. "When I talk about regulatory headwinds, that's not to suggest we go easy on capital levels."
Norton said Basel implementation is a "real issue" for small lenders. "Should we be thinking about a system that works better for smaller banks that doesn't give up on capital being important?" he said. "We will see what happens after the comment process. That is something we will be looking at very carefully."