- Key insight: Bank enforcement actions fell by 55% during the first year of the Trump administration, according to data compiled by financial advisory firm Klaros.
- Supporting data: Klaros' analysis shows that agencies issued 20 enforcement actions in the first quarter of 2025, but reduced that number to two by the fourth quarter. Terminated enforcement actions, meanwhile, rose from 40 in 2024 to 89 in 2025, showing a renewed focus on closing old cases.
- Forward look: The medium and long-term effects of the change in enforcement approach are uncertain, with some experts fearing that a weaker enforcement regime could allow risk to build up in the financial system, while others view the change as more of a procedural pivot.
Federal bank enforcement actions have fallen sharply since the start of the second Trump administration, but experts are divided about whether the decline represents a change in attitude about enforcement generally or just a shift in methods for holding banks accountable.
According to data compiled by financial services advisory firm Klaros, the total number of bank-level enforcement actions — that is, enforcement actions against banks rather than individual employees — from the Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Federal Reserve and National Credit Union Administration fell from 116 in 2024 to 52 in 2025, a roughly 55% decrease year-on-year. On a quarterly basis, enforcement actions slowed from 20 in the first quarter to just two by the fourth quarter of 2025.
David Zaring, professor of legal studies and business ethics at the University of Pennsylvania's Wharton school of business, said those numbers may be stark, but that enforcement is never a perfect proxy for regulatory diligence.
"Bank regulators have never viewed enforcement as a hugely important way to get their preferred policies going," Zaring said. Instead, "they do it through supervision and guidance."
That the drop is notable nonetheless, according to Zaring, the decrease would be concerning if regulators don't replace formal enforcement actions with other regulatory or supervisory actions to keep banks accountable.
"I would worry a little bit if supervision was greatly reduced and not replaced with something that's more efficient and effective … then you're really relying on banks utilizing the banking regulator services — like the discount window, or advice about who to put on the board next, or whether this candidate would be viewed with regulatory approval" as the primary course for regulators to influence banks, Zaring said. "That kind of informal channel is going to be the last one that's left. … Regulators could be taken by surprise by developments that they wouldn't find so surprising if they were, you know, actively supervising and enforcing."
Bank-level enforcement actions climbed steadily during the later years of the Biden administration, particularly following the 2023 regional banking crisis, but both the number of new and pending actions have decreased in 2025.
Regulators issued 65 bank-level actions in 2021, 64 in 2022 and 75 in 2023. Following the banking system turmoil, exemplified by the historic failures of Silicon Valley Bank, Signature Bank and First Republic, formal actions against firms spiked to 116 in 2024, the highest level in the last half-decade. The 52 enforcement actions in 2025, then, is a notable correction in enforcement activity.
But in addition to opening fewer new enforcement cases, regulators also worked to close prior enforcement actions last year. Terminated actions rose to 89 in 2025, more than double the 40 recorded in 2024, indicating a focus on winding down existing cases rather than initiating new ones. And that trend appears to be continuing, with the Federal Reserve lifting the remaining elements of its 2018 enforcement action against Wells Fargo earlier this month related to its
The shift has also begun drawing attention from lawmakers. At a recent hearing, Sen. Jack Reed, D-R.I.,
"I don't find it plausible that some of these banks have become models of acceptability," Reed said. "It seems as if you're just weakening enforcement policy."
Bowman responded that many of the actions had been in place for years and were lifted only after regulators determined "institutions have acted in a way that allowed us to understand that they have mitigated those circumstances."
But Zaring said bank regulators — particularly the Fed — tend to take an independent view of their enforcement powers, so the pace of enforcement shouldn't be "too attentive to the changing priorities of an administration."
"The FDIC and OCC are also being run by very traditional Republican regulators who still enjoy some degree of independence — maybe not much anymore, but some," Zaring continued.
But regulators have also been saying for months that they are intent on shifting their approach to supervision, focusing on
"We all share the common end goal of refocusing and strengthening supervision," Gould said. Regulators want to ensure examiners are "not diluting their message" and instead "focusing on what matters most," which he described as "material financial risk that can affect and harm" banks.
That shift will likely mean narrower exam scopes, Gould went on.
"At the OCC, generally speaking, we're going to be focused on … the CAMELS rating, the risk assessment, statutory requirements, and then any kind of [matters requiring attention] enforcement action work," Gould said. "If you're seeing us do more than those things, I would like to know about it."
Todd Phillips, an assistant professor at Georgia State University, fellow with the Roosevelt Institute and a former attorney with the FDIC, said the decline in enforcement seems to be directly attributable to a shift in enforcement priorities.
"It's clear that the regulators in this administration are taking just a very different perspective to supervision and enforcement than the Biden regulators," said Phillips. "It has to have an immediate, material, financial consequence to the institution, which is just very, very narrow."
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But Georgetown University Law Professor Art Wilmarth said the shift in enforcement tactics could lead to a buildup of risk and risk-taking at the banks that could bleed into the broader economy, much the way the rapid growth of mortgage-backed securities, collateralized debt obligations and other novel financial instruments led to the global financial crisis of 2008.
"What we're seeing is part of a much larger pattern," Wilmarth said. "The [drop in] enforcement certainly fits with … unfortunate past history that we saw between '93 and 2007, and that wasn't a happy history."
He pointed to what Columbia legal scholar John Coffee once described as a "regulatory sine curve," where periods of deregulation during economic booms are followed by crises and a wave of new rules. If enforcement weakens too much, Wilmarth added, competitive pressures can encourage risk-taking.
"You tend to have a period of deregulation and de-supervision leading up to the euphoric boom … then everything blows up. That creates enormous problems, because for banks who actually want to do the right thing … the problem is, their competitors are not likely to be doing that," Wilmarth said. "It's a race to the bottom."
But Zaring noted that agencies have historically relied more on supervision, guidance and interagency coordination than on large numbers of standalone enforcement cases. Many major actions, he noted, are brought jointly with other agencies on issues such as anti money-laundering or national security. As a result, enforcement totals can fluctuate widely, depending on circumstances.
"I'm never really surprised when enforcement by the prudential supervisors seems to be anemic, but I think it's really interesting that it's gone down so dramatically — and also not right away, during the first quarter of the Trump administration, but only recently," Zaring said. "It could be that getting people in and confirmed took a while, the regulators were proceeding on autopilot and that now these guys have come in and said, look, we want to take a different approach to enforcement, and now we're ready to implement that."
