The Roundup: Fed Chair Nominee, Skinny Account Debate, CFPB Blocks GAO, Bessent’s Regulatory Approach, Bank Safety Rule 

Welcome to the PerformLine Regulatory Compliance Roundup, home of the latest news, articles, and reports from our industry, curated for you. Let’s get into it.

In this edition:  Fed chair nomination puts central bank framework under review, Banks & fintechs split on Fed payment accounts, CFPB pushes back on GAO investigation, Congress probes Bessent’s deregulatory signals, Rule change proposal draws congressional opposition

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New Fed Chair Nominee Signals Shift in Central Bank Role

Former Federal Reserve governor Kevin Warsh has been nominated to serve as chair of the Federal Reserve. Warsh has previously called for reevaluating the central bank’s post-crisis policy framework, including the scope of asset purchase programs, the size of the Fed’s balance sheet, and its approach to economic data and modeling.

If confirmed, he is expected to review quantitative easing policies, consider further balance sheet reductions, and revisit aspects of the Treasury-Federal Reserve Accord governing monetary policy independence. Economists note any changes would occur gradually and within existing statutory authorities. Financial Times

Why It Matters: Leadership priorities at the Federal Reserve influence interest-rate policy, liquidity conditions, and supervisory expectations, even without new regulations. For financial institutions, potential changes in how the Fed uses its policy tools can affect funding costs, credit conditions, and forward guidance assumptions used in risk and compliance planning.

Waller Seeks Middle Ground for Federal Reserve Payment Accounts

The Federal Reserve is moving its earlier “skinny account” proposal beyond the conceptual stage, as industry feedback highlights differing views on access and safeguards.

Nonbank and crypto-focused firms requested broader payment rail access, while banking organizations emphasized anti-money-laundering controls, fraud prevention standards, and supervisory oversight for nonbank participants. The proposal limits access to select services and excludes interest payments and the discount window. It also imposes balance caps to limit risk.

As Federal Reserve Governor Christopher Waller put it: “You’re seeing one side pulling me this way and the other pulling me that way, so it’s finding the right kind of middle lane that I’m trying to get to with this ‘skinny’ account.” American Banker

Why It Matters: The proposal centers on who sits inside the payments perimeter — banks only, or banks plus certain payment providers. If implemented, the model could reshape bank-fintech sponsorship arrangements, settlement responsibilities, and monitoring expectations without changing underlying consumer protection rules.

CFPB Restricts GAO Access During Layoff Review

The Consumer Financial Protection Bureau (CFPB) limited the Government Accountability Office’s (GAO) access to staff and internal records during GAO’s review of CFPB layoffs and organizational changes.

The review was intended to assess how recent workforce reductions could affect the CFPB’s ability to carry out its statutory responsibilities. GAO officials said the bureau declined to allow interviews with current employees and restricted access to certain internal materials, potentially narrowing the scope of the findings.

The CFPB said it complied with legal requirements and questioned the need for broader GAO access. The watchdog agency noted that while its review will continue, the constraints could limit its ability to fully evaluate the impact of the staffing changes. American Banker

Why It Matters: GAO reports are a central tool for congressional oversight, particularly during periods of agency restructuring. Limiting access during a formal, published review raises transparency and accountability concerns at a time when the CFPB’s staffing levels, enforcement capacity, and long-term role are under scrutiny. For banks and fintechs, the episode adds uncertainty around how regulatory oversight may function amid ongoing operational changes.

Lawmakers Seek Clarity on Bessent’s Regulatory Vision

Treasury Secretary Scott Bessent faced questioning from lawmakers during recent congressional testimony, with discussion spanning regulatory tailoring, digital assets, deposit stability, and oversight of the Community Development Financial Institutions (CDFI) Fund.

Bessent described a general deregulatory approach and pointed to limited deposit volatility during recent banking stress as support for revisiting certain regulatory requirements. He suggested existing rules may no longer align with current risk conditions and expressed support for tailoring supervision based on institutional size and activity.

At the same time, Bessent offered few specifics on how regulatory adjustments would be implemented or which requirements could change. Lawmakers pressed for clarification on how a less prescriptive framework would address crypto activity, deposit protection, and consumer safeguards. ABA Banking Journal, American Banker

Why It Matters: The testimony reflects an ongoing debate over how financial regulation should balance institutional flexibility with consumer protection and systemic safeguards.The hearings suggest regulatory expectations may be reexamined at a policy level, but without near-term clarity on how oversight standards would change in practice. Until specific proposals emerge, existing supervisory frameworks remain in effect, even as policymakers continue to debate whether and how regulatory intensity should be recalibrated.

 Senators Oppose “Unsafe or Unsound” Rule Change  

Democratic lawmakers urged the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) to withdraw a proposed policy change that would revise how regulators determine whether a bank’s practices are “unsafe or unsound.”

In a letter to the agencies, lawmakers said the proposal could narrow regulators’ ability to take enforcement action by requiring a clearer link between bank conduct and material financial harm. They argued the change could limit supervisory discretion and delay intervention until risks have already escalated.

The FDIC and OCC have said the proposal is intended to clarify supervisory standards and improve consistency, but critics warned it could weaken oversight by raising the threshold for enforcement action. Banking Dive

Why It Matters: The dispute centers on how early regulators can intervene when identifying potential safety and soundness risks. If supervisory standards are narrowed, enforcement actions could hinge more heavily on demonstrated financial harm rather than emerging risk indicators. That distinction affects how supervisory findings translate into enforcement exposure and how institutions assess the likelihood and timing of regulatory action as policies evolve.

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