Ebrima Santos Sanneh

Acting Comptroller of the Currency Michael Hsu Thursday said AI providers and end-users — including banks — should share responsibility for errors that derive from artificial intelligence models.

The Federal Deposit Insurance Corp.'s Quarterly Banking Profile for Q1 showed that banks' net income margins got a boost, but FDIC Chair Martin Gruenberg said concerns around inflation, interest rate volatility and geopolitical uncertainty could mean tougher quarters ahead.

Federal Reserve Vice Chair Michael Barr Monday spoke at length about efforts to enhance banks' liquidity and long-term debt positions after last year's bank failures while saying little about the capital hikes in the embattled interagency Basel III endgame proposal.

Federal Reserve Governor Lisa D. Cook highlighted concerns over private credit growth, commercial real estate distress and escalating cyber threats in remarks on financial stability at the Brookings Institution Wednesday.

According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.

Federal Reserve Vice Chair Michael Barr Wednesday discussed regulators' ongoing concerns over banks' unrealized losses and commercial real estate values — particularly in the office sector.

The Securities and Exchange Commission finalized a pared-down version of rules governing climate-risk disclosure by public companies first proposed in March 2022. Experts say even the weakened rule will likely face challenges in Congress and the courtroom.

Top banking regulators reaffirmed their commitment to bolstering the Community Reinvestment Act despite a court challenge, emphasizing their personal dedication to seeing the rule implemented.

Banks historically have been averse to challenging their regulators in court, but a suit over the recently finalized Community Reinvestment Act implementation rules is a signal that the times have changed.

The Independent Community Bankers of America, American Bankers Association and other groups filed a lawsuit arguing that recent reforms to implementing regulations for the Community Reinvestment Act exceed statutory authority.

A coalition of financial trade groups issued a joint comment letter asserting that the federal bank regulators' proposed capital rule lacked justification and evidence required by the Administrative Procedure Act, threatening legal action if regulators don't delay and significantly amend the rule.

Members of the Financial Stability Oversight Council Thursday warned of increasing financial risks posed by artificial intelligence in its annual report, noting AI's potential to amplify cyber threats, induce herd behavior and even compromise bank safety and soundness.

The Treasury Department's Community Development Financial Institutions Fund has introduced significant updates to the CDFI certification application, aiming to simplify the process and establish clearer standards for responsible lending and community development.

Net income at banks fell 4.6% year over year in the third quarter, though it remained above pre-pandemic levels, according to the latest Quarterly Banking Profile. FDIC Chairman Gruenberg cautioned about deteriorating commercial real estate loans and unrealized losses on securities in a high interest rate enviroment.

Moderate Democrats on the Senate Banking Committee voiced concerns about the impact of the Basel III endgame proposal on small businesses and minority communities, saying regulators should consider revisions or an extended comment period.

The Financial Stability Oversight Council enhanced its powers to designate nonbank financial institutions as systemically important Friday, emphasizing transparency and the need to protect financial stability.

Banks and dissenting policymakers have raised the possibility of challenging regulators' Community Reinvestment Act overhaul in court, but it remains unclear whether they intend to walk the walk.

After years of discussion among regulators, the Federal Reserve Board has approved changes to its CRA rules that will base compliance exams on where lending occurs rather than branch locations. The updates — set to take effect in January 2026 — also emphasize lending in lower-income areas as well as community development loans and investments.

The Department of Justice reached a $9 million settlement Wednesday with Westerly, R.I.-based Washington Trust over race-based lending discrimination and redlining in the state, saying the bank denied lending services to Black and Hispanic neighborhoods from 2016 to 2021.

Federal Deposit Insurance Corp. Chairman Martin Gruenberg said Wednesday he wants to see tailored enhanced prudential standards and increased reporting requirements for specific nonbank financial institutions like open-ended mutual funds, hedge funds, and nonbank lenders, citing their potential systemic risks and the need for improved oversight.