US Bank Regulators Shift Focus to Financial Risks, Enforcement Actions Plummet

US bank regulators have shifted their focus to financial risks, leading to a significant drop in enforcement actions. According to a recent report, public enforcement actions across three key agencies - the Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC - declined from over 500 in 2015 to just 245 by 2025.

The new supervisory framework prioritizes material financial risks to bank safety and soundness, while reducing attention on procedural hiccups and reputational concerns. This change is attributed to Fed Vice Chair for Supervision Michelle W. Bowman's efforts to realign the examination processes and target genuine threats to bank stability.

The 'abnormal probability of abnormal harm' standard was introduced in 2026, requiring regulators to clear a higher bar before bringing enforcement actions against banks. Additionally, reputational risk has been formally eliminated from the supervisory playbook, which is seen as a significant development for crypto-adjacent banking.